What is the Brand Fund Contribution for a Hck Hot Chicken franchisee used for?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Such expenditures may include: (a) the costs of maintaining, administering, directing and preparing the secret shopper initiatives and rewards program (this program will include cash rewards paid to the highest scoring restaurants that Franchisor suggests be distributed to franchisee's employees as bonuses at the applicable restaurants); (b) creative development, production and placement of print advertisements, commercials, musical jingles, decals, radio spots, audio advertising, point of purchase materials, direct mail pieces, literature, outdoor advertising, door hangers, electronic media advertisements, and other advertising and promotional material; (c) creative development, preparation, production and placement of video, audio and written materials and electronic media, (d) to purchase artwork and other components for advertising; (e) media placement and buying, including all associated expenses and fees; (f) administering regional and multiregional marketing and advertising programs; (g) market research, marketing studies and customer satisfaction surveys, including the use of secret shoppers; (h) development and production of, and, to the extent applicable, acquisition of, premium items, giveaways, promotions, contests, public relations events, and charitable or nonprofit events; (i) creative development of signage, posters, and individual decor items including wall graphics; (j) recognition and awards events and programs; (k) system recognition events, including periodic national and regional conventions and meetings; (l) website, extranet and/or Intranet development, implementation and maintenance; (m) development, implementation and maintenance of a website that permits electronic commerce, reservation system and/or related strategies; (n) retention and payment of advertising and promotional agencies and other outside advisors, including retainer and management fees; (o) public relations and community involvement activities and programs; (p) expenditures for activities conducted for the benefit of co-branding, or other arrangements where "HCK Hot Chicken" brand products and/or services are offered in conjunction with other marks or through alternative channels of distribution; (q) development, amendment and revisions to the standards, policies and procedures set forth in the HCK Hot Chicken Brand Standards Manual; (r) stadium promotion marketing fees; (s) payment to Franchisor or its Affiliates, for indirect costs and overhead incurred in connection with the operation of its creative department(s), if any, and the administration of the Brand Fund; (t) payments for corporate and storelevel hosted access from data hosted solutions providers; (u) gift card blanks; and (v) retention and payment of social media agencies.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, the Brand Fund contribution from franchisees is used for various advertising, public relations, and promotional activities. These activities are designed to promote and enhance the image, identity, and patronage of both franchised and company-owned Hck Hot Chicken restaurants. This includes restaurants owned by the franchisor and its affiliates.
The expenditures covered by the Brand Fund are extensive. They include maintaining secret shopper initiatives and a rewards program, which may involve cash rewards distributed to franchisee's employees as bonuses. The fund also covers the creation, production, and placement of various advertising materials, such as print ads, commercials, jingles, and electronic media advertisements. Additionally, the Brand Fund is used for market research, customer satisfaction surveys, the development of promotional items, public relations events, and charitable activities.
Furthermore, the Brand Fund supports the development of signage, posters, and decor items, as well as recognition and awards events. It also covers the costs associated with system recognition events like national and regional conventions, website development and maintenance, and the retention of advertising agencies and other advisors. The fund may also be used for co-branding activities, revisions to the Hck Hot Chicken Brand Standards Manual, stadium promotion marketing fees, and payments to the franchisor or its affiliates for overhead costs related to the creative department and Brand Fund administration. Finally, the Brand Fund can cover payments for data hosting, gift card blanks, and social media agency services.
Prospective Hck Hot Chicken franchisees should understand that their Brand Fund contributions are pooled and used for a wide range of marketing and promotional activities intended to benefit the entire Hck Hot Chicken system. While franchisees do not have direct control over how the Brand Fund is spent, the franchisor outlines the types of expenditures that are permissible, offering some transparency into how these funds are managed. Franchisees also need to be aware that they must spend 1% of annual gross sales on local advertising, and failure to do so requires payment of the difference to the franchisor or Brand Fund.