Is a Southern Steer franchisee required to pay a Brand Fund Contribution?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
d, the Local Advertising Cooperative will prepare annual unaudited financial statements, which will be available for review by You upon request. We will have the power to require the Local Advertising Cooperative to be changed, dissolved, or merged.
Brand Fund
We reserve the right to establish a Brand Fund upon 30 days prior notice to You. You will pay a weekly contribution in the amount of 1% of Gross Revenue ("Brand Fund Contribution"). The weekly contribution is uniform to all franchisees. Neither We nor our affiliates contribute to the Brand Fund. The Brand Fund Contribution will be deposited by Us into a segregated commercial or savings bank account ("Brand Fund"). The Brand Fund Contribution will not be credited towards Your Local Advertising obligation or any contribution to a Local Advertising Cooperative.
The Brand Fund may be used for, but not limited to, production and placement of media advertising, media relations salaries, administrative costs and creating and testing direct response literature, social media, direct mailings, brochures, collateral material, field visits, annual Brand Conference, advertising, surveys, or other public relations expenditures, including agency costs and commissions and for other similar expenses. Advertising may be placed in local, regional, or national media of Our choice, including print, direct mail, radio, online media, e-mail, social media, or television. The Brand Fund will not be used to solicit Franchisees. If You request, We will send You an annual unaudited financial statement for the Brand Fund that indicates how the Brand Fund has been spent during the past fiscal year. We do not have the Brand Fund audited, so audited financial statements are not available. We assume no other direct or indirect liability or obligation to collect amounts due to the Brand Fund or to maintain, direct or administer the Brand Fund.
The Brand Fund will be administered by Us. We may be reimbursed from the Brand Fund for reasonable administrative costs, salaries, and overhead expenses related to the administration and operation of the Brand Fund and its programs, including conducting market research, preparing material, social media, and other programs as well as administration, collecting and accounting for Brand Fund contributions.
As of January 31. 2025, We have not collected any Brand Fund Contributions. In any fiscal year, an amount greater or less than the aggregate contributions of all Southern Steer Business to the Brand Fund may be spent in that year.
The Brand Fund may borrow from Us or other lenders to cover deficits or invest any surplus for future use on any terms that We determine. We may reimburse ourselves or other lenders for such loans from the Brand Fund. Any amounts that remain in the Brand Fund at the end of each year accrue and We may apply them toward next year's expenses. We also reserve the right to borrow excess funds from the Brand Fund periodically in Our discretion to support other efforts to develop the System.
Source: Item 11 — ITEM. 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 26–35)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, Southern Steer franchisees may be required to pay a Brand Fund Contribution. Southern Steer reserves the right to establish a Brand Fund with 30 days prior notice to the franchisee. If established, franchisees will pay a weekly contribution of 1% of Gross Revenue. This contribution is uniform for all franchisees, and neither Southern Steer nor its affiliates contribute to the Brand Fund. The Brand Fund Contribution will not be credited towards any local advertising obligations. As of January 31, 2025, Southern Steer had not collected any Brand Fund Contributions.
The Brand Fund is administered by Southern Steer and may be used for various advertising and public relations expenditures, including media advertising, salaries, administrative costs, direct response literature, social media, direct mailings, brochures, field visits, the annual Brand Conference, surveys, and agency costs. Southern Steer may be reimbursed from the Brand Fund for reasonable administrative costs, salaries, and overhead expenses. Advertising may be placed in local, regional, or national media of Southern Steer's choice.
Southern Steer does not guarantee that advertising expenditures from the Brand Fund will directly benefit any franchisee or be proportionate to their contribution. Any amounts remaining in the Brand Fund at the end of each year accrue and may be applied toward the next year's expenses. Southern Steer also reserves the right to borrow excess funds from the Brand Fund to support other efforts to develop the System. If a franchisee requests, Southern Steer will provide an annual unaudited financial statement for the Brand Fund indicating how the funds were spent during the past fiscal year.