What is the current monthly Marketing Fee that Aplus franchisees contribute?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
amples or photographs upon our request.
Marketing Fee
Each month you are required to contribute up to $1,500 or 2% of Gross Sales, whichever is less, which we call the Marketing Fee. Currently all franchisees contribute $750 per month. The majority of our company operated stores (the exceptions being of two small kiosks) pay the Marketing Fee payments on the same basis as franchisees.
We may use Marketing Fee monies, in our sole discretion, to direct all advertising programs, and we have exclusive control over the creative concepts and content of these programs, advertising placement decisions, and the allocation of Marketing Fee contributions to production, placement, and other costs.
We will not use Marketing Fee contributions for creating or placing any advertisement that is principally a solicitation for new franchisees, but may include in all advertising prepared using Marketing Fee contributions (including Internet advertising) information concerning franchise opportunities, and a portion of Marketing Fee contributions may be used to create and maintain one or more pages on our Website devoted to advertising franchise opportunities and identifying and screening inquiries and applications submitted by franchise candidates.
We have the right to reimburse ourselves for our costs of personnel and other administrative costs associated with providing services to the Marketing Fee, and we may use Marketing Fee contributions to defray our reasonable administrative costs and overhead incurred in connection with activities reasonably related to the Marketing Fee. The Marketing Fee is not a trust or escrow, and neither we nor our affiliates have any fiduciary obligation for administering the Marketing Fee or for any other reason and there is no requirement that the Marketing Fee monies be audited. We do not provide an accounting on how Marketing Fee monies are spent. However, most of the Marketing Fee monies are spent in the year in which they accrue, and the remaining amount is carried over to the following year.
We spend and/or make available Marketing Fee monies for each APLUS Store operated by franchisees. However, we have no obligation to ensure that expenditures from the Marketing Fee monies will affect any geographic area are or will be proportionate or equivalent to the contributions to the APLUS Stores operating in that geographic area. We also have no obligation to ensure that any APLUS Store will benefit directly or in proportion to its Marketing Fee contribution or from the development of advertising, business development and marketing materials
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, AND TRAINING (FDD pages 40–47)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, franchisees are required to contribute to a Marketing Fee each month. The amount can be up to $1,500 or 2% of Gross Sales, whichever is less. Currently, however, all Aplus franchisees contribute a flat rate of $750 per month for this fee. This fee is used at Aplus's discretion to direct advertising programs, and Aplus has exclusive control over the creative content, advertising placement, and allocation of these funds.
The Marketing Fee is not used for advertisements that primarily solicit new franchisees, though information about franchise opportunities can be included in advertising. Aplus can also use the Marketing Fee to cover personnel and administrative costs associated with providing services related to the Marketing Fee. These fees are not held in a trust or escrow account, and Aplus has no fiduciary obligation regarding their administration.
While Aplus does not provide an accounting of how the Marketing Fee monies are spent, the FDD states that most of the funds are spent in the year they accrue, with any remaining amount carried over to the following year. Aplus spends and/or makes available Marketing Fee monies for each APLUS Store operated by franchisees. However, Aplus is not obligated to ensure that expenditures from the Marketing Fee monies will affect any geographic area are or will be proportionate or equivalent to the contributions to the APLUS Stores operating in that geographic area. Aplus also has no obligation to ensure that any APLUS Store will benefit directly or in proportion to its Marketing Fee contribution or from the development of advertising, business development and marketing materials and/or programs, the placement of advertising or otherwise.
This means that while franchisees contribute to the Marketing Fee, there is no guarantee that their specific location will directly benefit from the advertising and marketing efforts funded by these contributions. Prospective franchisees should consider this when evaluating the potential benefits of the Aplus franchise system.