How often do Annex Brands franchisees contribute to the system-wide marketing fund?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
All retail franchisees and any retail company-owned businesses contribute equally to the fund on a weekly basis. Contributions are 2% of weekly Gross Receipts. We may require you to make payments at an interval as established by us. We will administer the fund. The fund is not audited. We will prepare an unaudited report of the operation of the fund annually within 90-120 days after each fiscal year end, and on your written request, we will make the report available to you. We may use contributions to the fund and associated earnings for soliciting the sale of franchises. Other than reimbursement for reasonable costs and overhead incurred in activities related to the administration or direction of the fund, neither we nor any affiliate will receive any payment for providing products or services to the fund. If we spend more than the contributions accumulated in the fund during any fiscal year, we will have the right to receive, on demand, reimbursement from the fund in later years to the extent of the excess expenditure. If any contributions to the fund, including any associated earnings, are not spent in the fiscal year in which they accrue, they will remain in the fund for use in following years. We reserve the right to terminate the fund at any time, but we will not do so until all monies in the fund have been expended for the purposes described in the franchise agreement.
We are not required to spend any amount from the fund, or any amount from any other source, on marketing, advertising, or promotions in your geographic area. However, under our current Matching Funds Advertising Program (Subsection 10.A of the franchise agreement), your Advertising Association may apply to us for a portion of the fund for use in your geographic area.
In our fiscal year ended September 30, 2024, the retail fund was used for: soliciting the sale of franchises, 4%; production of marketing, advertising and promotional materials, and media
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 45–62)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, all retail franchisees, including company-owned businesses, are required to contribute to the system-wide marketing fund on a weekly basis. These contributions are set at 2% of the franchisee's weekly Gross Receipts. However, Annex Brands has the discretion to require franchisees to make these payments at different intervals, as they establish.
This weekly contribution ensures a consistent flow of funds into the marketing pool, which Annex Brands uses to promote the brand and support franchisees. The funds are used for various marketing activities, including soliciting the sale of franchises (4%), producing marketing materials and media placement (14%), internet, website and public relations (19%), administrative expenses (25%), and the Matching Funds Advertising Program (38%).
It is important to note that the marketing fund is not audited, although Annex Brands will provide an unaudited report of the fund's operation annually, within 90 to 120 days after the end of each fiscal year. Franchisees can request this report in writing. Additionally, Annex Brands retains the right to terminate the fund at any time, provided that all monies in the fund are expended for the purposes outlined in the franchise agreement. Franchisees should also be aware of additional marketing expenses, such as the local advertising requirements through Advertising Associations and ongoing local retail center marketing.