What was the amount of franchise marketing expenses for Hck Hot Chicken in 2023?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to the Brand Fund Contributions, Franchisee must spend one percent (1%) of annual Gross Sales on local advertising each year ("Local Advertising Requirement"). If Franchisee fails to spend the Local Advertising Requirement, Franchisee will be required to pay the difference to us, or if established, the Brand Fund. Franchisee agrees, at its sole cost and expense, to issue and offer such rebates, giveaways, and other promotions in accordance with advertising programs established by Franchisor, and further agrees to honor the rebates, giveaways, and other promotions issued by other HCK Hot Chicken franchisees under any such program, so long as such compliance does not contravene any applicable law, rule, or regulation. Franchisee will not create or issue any gift cards/certificates, and will only sell gift cards/certificates that have been issued or sponsored by Franchisor and which are accepted at all HCK Hot Chicken Restaurants, and Franchisee will not issue coupons or discounts of any type except as approved by Franchisor.
8.3 Brand Fund.
8.3.1 In accordance with Section 4.2 of this Agreement, Franchisee's Brand Fund Contribution shall be applied to the Brand Fund.
Franchisor will use the Brand Fund for national, regional, or local advertising, public relations or promotional campaigns or programs designed to promote and enhance the image, identity, or patronage of franchised, and Franchisor-owned (including Affiliate-owned) Restaurants.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
I am unable to provide the exact amount of Hck Hot Chicken's franchise marketing expenses in 2023, as the provided FDD excerpts do not include a specific figure for that year. However, the 2025 Franchise Disclosure Document does outline how Hck Hot Chicken uses its Brand Fund for marketing and advertising purposes. These expenditures can include maintaining secret shopper programs, developing advertising materials, conducting market research, organizing promotional events, and maintaining websites.
The FDD states that Hck Hot Chicken franchisees must contribute to the Brand Fund, which is used for national, regional, and local advertising efforts. In addition to this Brand Fund contribution, franchisees are also required to spend 1% of their annual Gross Sales on local advertising. If a franchisee fails to meet this local advertising requirement, they must pay the difference to Hck Hot Chicken or the Brand Fund.
For a prospective franchisee, this means they should budget not only for the Brand Fund contribution but also for the additional 1% local advertising spend. It is important to inquire with Hck Hot Chicken about the specific amounts allocated to the Brand Fund and how those funds were used in previous years to gauge the effectiveness of the marketing efforts. Understanding these costs and strategies is crucial for assessing the overall financial commitment and potential return on investment.