What does Dickeys Barbecue Pit agree to do after receiving the Restaurant Opening Fee?
Dickeys_Barbecue_Pit Franchise · 2024 FDDAnswer from 2024 FDD Document
By selecting the Marketing Package and signing this Addendum, Franchisee agrees to pay Dickey's the Restaurant Opening Fee associated with the Marketing Package as identified on the "Marketing Kit Options" page attached hereto as Exhibit A before Franchisee attends Dickey's initial training program.
Franchisee acknowledges and agrees that the Marketing Package selected by Franchisee is based upon Franchisee's independent market research, and that Dickey's does not make any marketing recommendations other than the "Pitmaster's Premiere" Marketing Package.
After receipt by Dickey's of the Restaurant Opening Fee, Dickey's agrees to exercise commercially reasonable efforts to spend the Restaurant Opening Fee on the Restaurant's opening promotion in accordance with the Marketing Packaged selected by Franchisee.
If Dickey's fails to spend the entire amount
of the Restaurant Opening Fee on the Restaurant's opening promotion within six (6) months after the Restaurant's opening, the remaining balance of the Restaurant Opening Fee may be deposited by Dickey's into the Marketing Fund for use by Dickey's in accordance with the terms of the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD pages 95–96)
What This Means (2024 FDD)
According to Dickeys Barbecue Pit's 2024 Franchise Disclosure Document, after receiving the Restaurant Opening Fee, Dickeys Barbecue Pit agrees to exert commercially reasonable efforts to spend the Restaurant Opening Fee on the restaurant's opening promotion. This expenditure will align with the Marketing Package selected by the franchisee. The franchisee selects a marketing package from the options provided in the Restaurant Opening Addendum.
Dickeys Barbecue Pit does not offer marketing recommendations beyond the "Pitmaster's Premiere" Marketing Package, and the franchisee's choice should be based on their own market research. This implies that franchisees have the autonomy to choose a marketing approach that best suits their local market conditions, but they must conduct their own due diligence to determine the most effective strategy.
If Dickeys Barbecue Pit does not spend the entire Restaurant Opening Fee within six months of the restaurant's opening, the remaining balance may be deposited into the Marketing Fund. This fund is then used by Dickeys Barbecue Pit in accordance with the terms outlined in the Franchise Agreement. Franchisees should be aware that any advertising and promotional campaigns they plan to use must be approved by Dickeys Barbecue Pit before implementation.
This arrangement ensures that the funds are used for their intended purpose, but also gives Dickeys Barbecue Pit some flexibility in managing unspent funds. Franchisees should carefully review the terms of the Marketing Package and the Franchise Agreement to understand how these funds will be managed and used, and what control they have over the marketing activities.