Can 1 800 Packouts use the Brand Fund for business development?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
d any amount on advertising in the market in which your Franchised Business is located.
Brand Fund. You must contribute the Marketing Fee an amount designated by us up to 3% of your Gross Sales to the Brand Fund. We will administer the Brand Fund. The Franchised Business owned by us or our affiliates will contribute to the Brand Fund but does not have a set amount it contributes.
We will determine, in our sole discretion, when, how and where the payments deposited into the Brand Fund will be spent. We select the types of media used and the location of the advertising campaigns administered through the Brand Fund. We use or may use the following media: print, radio, television, telephone, smart phone, social media and Internet. We may also use the funds for general public relations, for business development, and to otherwise obtain and build brand awareness. All advertising and marketing materials will be prepared by us or by outside advertising/public relations/promotional agencies. We will not use the advertising fund for soliciting new franchise sales.
The Brand Fund will be held in an account separate from our other funds. We may spend in any fiscal year an amount greater or less than the total contribution of Franchised Businesses to the Brand Fund in that year. If we do not use all the funds in the Brand Fund in the year in which they accrue, we may use these amounts in the next fiscal year. We may cause the Brand Fund to borrow from us or other lenders to cover deficits of the Brand Fund or cause the Brand Fund to invest any surplus for future use by the Brand Fund. We may collect for remission to the Brand Fund any advertising monies or credits offered by any supplier to you based upon purchases you make. All interest earned on monies contributed to the Brand Fund will be used to pay advertising costs of the Brand Fund before other assets of the Brand Fund are expended. Sums paid by you to the advertising fund may be used by us to defray any of our operating expenses and overhead reasonably related to the administration, direction or operation of the advertising fund, programs, and activities. We will prepare an annual, unaudited statement of monies collected and costs incurred by the Brand Fund and will make it available to you on written request.
The Brand Fund is intended to enhance recognition of the Marks and patronage of Franchised Businesses. We are a nationwide brand and intend to use the fund to help promote the image and good will of the entire brand through local, regional and national marketing campaigns.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 32–39)
What This Means (2025 FDD)
According to 1 800 Packouts' 2025 Franchise Disclosure Document, the Brand Fund, which franchisees contribute up to 3% of their gross sales to, can be used for business development. 1 800 Packouts has sole discretion in determining when, how, and where the Brand Fund payments will be spent. They may use the funds for general public relations, business development, and to otherwise obtain and build brand awareness. All advertising and marketing materials will be prepared by 1 800 Packouts or by outside advertising/public relations/promotional agencies.
1 800 Packouts emphasizes that the Brand Fund is intended to enhance recognition of the brand and patronage of franchise businesses. They aim to promote the image and goodwill of the entire brand through local, regional, and national marketing campaigns. However, 1 800 Packouts is not obligated to ensure that expenditures from the Brand Fund in any geographic area are proportionate or equivalent to the contributions made by franchise businesses operating in that area, nor are they obligated to ensure that any franchise business will benefit directly or in proportion to its contribution.
1 800 Packouts also clarifies that they assume no direct or indirect liability or obligation to any franchisee in connection with the maintenance, direction, or administration of the Brand Fund. They have the right to terminate the Brand Fund with 30 days' written notice, and any unspent monies will be distributed to 1 800 Packouts and its franchisees in proportion to their respective contributions during the preceding 12-month period. 1 800 Packouts also retains the right to reinstate the Brand Fund under the same terms and conditions.