What is the maximum monthly Marketing Fee that an Aplus franchisee is required to contribute?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
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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 is capped at the lesser of $1,500 or 2% of Gross Sales. Currently, Aplus states that all franchisees contribute $750 per month. This indicates that while the maximum potential contribution is $1,500, the actual amount paid may be lower depending on gross sales and the current contribution rate set by Aplus.
The Marketing Fee is used at Aplus's discretion for advertising programs, with the company having exclusive control over the creative content, placement, and allocation of funds. Aplus states that the Marketing Fees will not be used to solicit new franchisees, but franchise opportunity information may be included in advertising. Aplus also has the right to reimburse itself for personnel and administrative costs associated with managing the Marketing Fee.
It is important to note that the Marketing Fee is not held in a trust or escrow account, and Aplus does not provide franchisees with an accounting of how the funds are spent. While Aplus aims to spend the Marketing Fee monies in the year they accrue, any remaining amount may be carried over to the following year. Aplus also does not guarantee that marketing expenditures will directly benefit any specific Aplus store or geographic area in proportion to its contribution. This means that franchisees may be required to pay the Marketing Fee without a guarantee of direct or proportional benefit from the resulting marketing efforts.