What section outlines the 'Sales Promotion Activities and Fees' requirements for a Dq Treat franchise?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
and other advertising materials Company furnishes or makes available to Licensee, and accurately depict the products and Trademarks.
- (3) Company owns and can use and permit others to use any sales promotion or other advertising materials, ideas, concepts or programs developed by Licensee.
9. FEES, REPORTING, AND AUDIT.
- 9.1 Initial Franchise Fee. Licensee must pay to Company an initial franchise fee of $25,000, which has been paid prior to or upon the date of execution of this agreement. Except as described in this agreement, the initial franchise fee is not refundable.
- 9.2 Continuing License Fee. Licensee must pay to Company monthly a continuing license fee of 5% of Gross Sales.
- 9.3 Sales Promotion Program Fee.
- (A) Licensee must pay to Company monthly a sales promotion program fee of:
- (1) For Orange Julius® branded products, up to 6% of Gross Sales. The current fee is 5% for Street Locations, and 1.25% for Captive-venue Locations;
- (2) For all other products, 5% 6% of Gross Sales.
- (B) Company will determine the exact percentage to be paid by Licensee within the ranges in section 9.3(A) without regard to the amount that any other licensee of Company may pay. Company will let Licensee know at least 90 days in advance of imposing any requirement that Licensee pay a higher percentage within the applicable range.
- (C) Licensee must also pay all sales promotion fees required by any lease or sublease for the Restaurant premises, and must comply with all sales promotion requirements of Licensee
- (A) Licensee must pay to Company monthly a sales promotion program fee of:
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to the 2025 Dq Treat FDD, Section 9.3 outlines the requirements for 'Sales Promotion Program Fees'. This section details the fees a licensee must pay to Dq Treat monthly for sales promotion programs. For Orange Julius branded products, the fee is up to 6% of Gross Sales, with the current fee being 5% for Street Locations and 1.25% for Captive-venue Locations. For all other products, the fee is 5% to 6% of Gross Sales. Dq Treat determines the exact percentage within these ranges without considering what other licensees pay, and will provide at least 90 days' notice before requiring a higher percentage.
In addition to the fees payable to Dq Treat, the franchisee must also pay all sales promotion fees required by any lease or sublease for the Restaurant premises and comply with all sales promotion requirements of their lease or sublease. If the franchisee is Dq Treat's or an affiliate's sublessee, they must pay the required lease sales promotion fees to Dq Treat, even if the landlord delays or fails to enforce prompt compliance with all lease requirements.
The FDD also states that Dq Treat has the sole right to determine how the sales promotion program fees will be spent, including the selection of promotional materials and activities. Dq Treat and its affiliates have no fiduciary obligation to DQ® licensees regarding sales promotion activities or expenditures of sales promotion program fees, and these fees are not held in trust. Dq Treat will make a good faith effort to expend the fees in the general best interests of the DQ® brand or Franchise System and will provide sales promotion activities receipts and expenditures upon request, but is not required to audit these receipts and expenditures.
The franchisee must only use sales promotion or other advertising materials that Dq Treat furnishes, makes available, or approves. Dq Treat may periodically make sales promotion or other advertising materials available to the franchisee at a reasonable cost, which may be included in the sales promotion program fee. Franchisees cannot transfer these materials to any third party or allow a third party to use them. All sales promotion or other advertising materials developed by the franchisee must be submitted to Dq Treat for written approval prior to use, including items like menu board transparencies, posters, and online communication.