How are unexpended contributions and earnings from the Anago advertising fund handled in subsequent years?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
franchise System. The balance, including any interest earned by the Fund, will be used for advertising and related expenses. Fund contributions not spent in the fiscal year in which they accrue will typically be carried forward to the next year and spent on advertising
and related expenses. We shall have the right to terminate the Fund at any time, however, the Fund will not be terminated until all contributions have been expended.
As of the issuance date of this Disclosure Document, there is no Fund in effect. We are not required to spend any amount on advertising in your Area or territory. If a Fund is developed, businesses owned by us and/or our affiliates will be required to contribute.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, contributions to the advertising fund not spent in the fiscal year they accrue are typically carried forward to the next year. These funds are then used for advertising and related expenses. This means that if Anago franchisees contribute to the fund, and those contributions aren't fully used within that year, the remaining balance is rolled over for use in the following year's advertising efforts.
Anago details that if all contributions and earnings by the fund are not expended during the taxable year in which they are received, expenditures in the following taxable year or years are made first out of accumulated earnings from previous years. Then, expenditures are made from Anago's earnings in the current year, and finally from contributions. This outlines a specific order in which the advertising funds are used, prioritizing accumulated earnings before using current contributions.
It's important to note that Anago has the right to terminate the fund at any time, but the fund will not be terminated until all contributions have been expended. This provides some assurance to franchisees that their contributions will eventually be used for the intended advertising purposes, even if the fund is discontinued. However, Anago is not required to spend any amount on advertising in a franchisee's specific area of operation, giving Anago discretion over where and how the advertising funds are spent.