Is the 360 Painting Marketing Fund considered a trust?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
All monies paid into the Marketing Fund will be accounted for separately from our general operating revenues. We anticipate that all contributions to the Marketing Fund will be expended during the Marketing Fund's fiscal year in which they are received. The Marketing Fund is not a trust, and we assume no fiduciary duty in administering the Marketing Fund. Marketing Fund surpluses, if any, may be expended in the following fiscal year(s). We may advance money to the Marketing Fund from time to time. In this event, we may be reimbursed by the Marketing Fund for the monies advanced, including a reasonable interest rate. The Marketing Fund will not be audited, but at your request you may receive an annual report of expenditures and advertising contributions for the fiscal year most recently ended.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–38)
What This Means (2025 FDD)
According to the 2025 360 Painting Franchise Disclosure Document, the Marketing Fund is explicitly stated not to be a trust. 360 Painting also assumes no fiduciary duty in administering the Marketing Fund. This means that while the funds are accounted for separately from 360 Painting's general operating revenues, the franchisor has considerable discretion in how the money is spent. Franchisees contribute to this fund, with the amount being the greater of 2% of gross sales per week or $50 per week.
360 Painting directs all Marketing Fund programs and has sole discretion over the concepts, materials, and media used. The aim of the Marketing Fund is to support brand recognition and sales for 360 Painting businesses across the United States and Canada. However, 360 Painting is not obligated to ensure that each franchisee benefits directly or proportionally from the fund's expenditures.
While the Marketing Fund is not audited, 360 Painting will provide an annual report of expenditures and advertising contributions for the most recently ended fiscal year if a franchisee requests it. Any surpluses in the Marketing Fund may be used in subsequent fiscal years, and 360 Painting may advance money to the fund, to be reimbursed later with a reasonable interest rate. This arrangement gives 360 Painting flexibility in managing the Marketing Fund, but it also means franchisees have less direct control or guarantee of specific returns on their contributions.