What is the purpose of the marketing fund maintained by Annex Brands?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee.
Franchisee agrees that the Fund may be used to meet any and all costs of maintaining, administering, directing, developing and preparing national, regional or local marketing materials, brand and marketing assets, programs, and public relations activities, including the costs of preparing and conducting television, radio, magazine, billboard, print or digital, Internet, email marketing programs, social media platforms, online directory listings, other networking platforms, and other media programs and activities, the costs of employing advertising agencies or suppliers to assist therewith, and the cost of providing promotional posters or brochures, print or digital marketing materials, and other sales aids to Centers. Franchisee also agrees that the fund may be used for soliciting the sale of franchises.
The Fund will be accounted for separately from other funds of Franchisor and will not be used to defray any of Franchisor's general operating expenses, except such reasonable salaries, administrative costs, and overhead as Franchisor may incur in activities related to the administration or direction of the Fund and its programs (including conducting market research, preparing marketing materials or brand and marketing assets, and collecting and accounting for contributions to the Fund). An unaudited report of the operation of the Fund will be prepared annually by Franchisor within 90-120 days after each fiscal year end, and will be made available to Franchisee on written request. Franchisor may spend in any fiscal year an amount greater or less than the aggregate contributions of Centers to the Fund in that year. If less than the aggregate contribution amount is spent in 1 year, then the remainder will roll over to the next year. There will be no markup or profit to Franchisor from marketing, promotional programs or the collection and administration of the Fund.
Franchisee understands and acknowledges that the Fund is intended to maximize general recognition and patronage of the Marks and Centers for the benefit of Franchisor and all Centers. Franchisee agrees to participate in all Fund programs.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 FDD, Annex Brands' marketing fund is used to cover the costs of various marketing and public relations activities at the national, regional, and local levels. These activities include creating and distributing marketing materials, managing the brand, and conducting public relations. The fund can be used for television, radio, magazine, billboard, print, digital, internet, email marketing, social media, and online directory listings. It also covers the costs of hiring advertising agencies and providing promotional materials to franchise centers. The fund may also be used to solicit the sale of franchises.
Annex Brands accounts for the marketing fund separately from its other funds and will not use it for general operating expenses, except for reasonable salaries, administrative costs, and overhead related to managing the fund and its programs. This includes market research, preparing marketing materials, and collecting and accounting for fund contributions.
Annex Brands will prepare an unaudited report on the fund's operation annually within 90-120 days after the fiscal year end, and will provide it to franchisees upon written request. Annex Brands may spend more or less than the total contributions to the fund in any given year, with any unspent funds rolling over to the next year. The FDD specifies that Annex Brands will not profit from the marketing or promotional programs, or from the collection and administration of the fund. Franchisees are required to participate in all marketing fund programs, and the fund is intended to maximize recognition of the Annex Brands marks and centers.