Who owns the earnings of the Anago advertising fund?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Neither the Fund nor its earnings will belong to Us or AFI.
We do not owe any fiduciary obligation to You for administering the Fund or any other reason.
Separate bookkeeping accounts will be maintained for the Fund.
A statement of operations of the Fund will be prepared annually and will be made available to You at Your request.
We may opt to have the Fund audited annually, at the Fund's expense, by an independent certified public accountant.
- (d) If all contributions to and earnings by the Fund are not expended during the taxable year in which the contributions and earnings are received, all expenditures in the following taxable year or years are made first out of accumulated earnings from previous years, next of Our earnings in the current year and finally from contributions.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, neither Anago nor AFI (presumably Anago Franchising International) owns the advertising fund or its earnings. The document states clearly that the fund and its earnings do not belong to Anago or AFI. This means that while Anago and/or AFI administer the fund, they cannot claim ownership of the money within it.
The advertising fund is intended to maximize recognition of Anago's trademarks and system for the benefit of all franchisees. The funds are used to cover the costs of advertising, marketing, public relations, and promotional programs. This includes media advertising campaigns, direct mail, marketing surveys, and employing advertising agencies. The fund can also be used to provide rebates or reimbursements to franchisees for local advertising expenditures that Anago or AFI have approved in advance.
Anago maintains separate bookkeeping accounts for the advertising fund, ensuring that franchisee contributions are not used for the company's general operating expenses. While Anago can use the contributions to cover its own costs related to administering the fund, the fund itself and its earnings remain separate. An annual statement of operations for the fund will be prepared by an independent public accountant and made available to franchisees upon request. This separation of funds and the provision of financial statements offer some transparency to franchisees regarding how their advertising contributions are being used.
If all contributions and earnings are not spent during the taxable year, expenditures in subsequent years are made first from accumulated earnings, then from Anago's earnings in the current year, and finally from contributions. Anago has the right to terminate the fund at any time, but all remaining monies must be spent before termination. This provides some assurance that the funds will be used for their intended purpose, even if the fund is discontinued.