If the Advertising association fee is paid directly to Annex Brands, how does Annex Brands use those funds?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty fee | 5% of Gross Receipts (2) | Each Wednesday, after the close of business, for the previous week ending Saturday | We may establish other due dates. You must report Gross Receipts each Saturday after the close of business before midnight for the week ending on that Saturday. You must pay us by automatic bank draft. (3) |
| Marketing fee (4) | 2% of Gross Receipts (2) | Each Wednesday, after the close of business, for the previous week ending Saturday | We may establish other due dates. You must report Gross Receipts each Saturday after the close of business before midnight for the week ending on that Saturday. You must pay us by automatic bank draft. (3) We administer a system-wide marketing fund. |
| Advertising association fee | Monthly, the greater of $150 or 1% of Gross Receipts (2) | 10 days after end of each calendar month or as otherwise provided by local or regional association bylaws | You must participate in a local or regional association. The board of directors of your association may also periodically impose special assessments on its members. You pay fees by automatic bank draft, either to the association or directly to us, at our option. (3) |
Source: Item 6 — OTHER FEES (FDD pages 24–32)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, franchisees must participate in a local or regional advertising association. The advertising association fee is paid monthly and is the greater of $150 or 1% of gross receipts. Franchisees pay this fee by automatic bank draft either to the association or directly to Annex Brands, at Annex Brands' option. The FDD does not specify how Annex Brands uses the advertising association fees if paid directly to them.
Because the document does not specify how Annex Brands uses the advertising association fees, prospective franchisees should inquire directly with Annex Brands about the specific allocation and usage of these funds when they are collected by Annex Brands instead of the local or regional association. Understanding how these funds are used is essential for evaluating the value and transparency of the advertising program.
It is typical in franchising for advertising fees to be used for marketing and promotional activities that benefit the entire franchise system. These activities can include national advertising campaigns, online marketing, and the development of marketing materials. Franchisees should seek clarity on whether Annex Brands provides detailed accounting of these funds and how the funds are used to support the franchisees' businesses.