Who decides how the Apricot Lane advertising fund may be used?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
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- FRANCHISOR shall direct and approve all marketing and advertising programs with sole discretion over the creative concepts, materials and media used in such programs and the placement and allocation thereof. FRANCHISOR cannot and does not ensure that any particular FRANCHISEE benefits directly or pro rata from the placement of any advertising. FRANCHISEE shall not have the right to withhold or offset any payment to the Fund based on FRANCHISEE's dislike of the content of the programs or the media or market areas in which they appear.
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- FRANCHISOR shall, for each of its FRANCHISOR-owned or affiliated Specialty Stores, if any, make contributions to the Fund equivalent to the contributions required of Franchised Businesses.
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- The Fund may, at FRANCHISOR's sole discretion, be used to meet any and all costs of creating, producing, maintaining, administering, directing, approving and conducting
advertising, marketing and promotional activities and materials including, without limitation the cost of preparing and producing mass media, magazine and newspaper, digital advertising and campaigns; the cost of direct mail and outdoor billboard advertising; the cost of public relations activities and advertising agencies; the cost of developing and maintaining an Internet Website; the cost of personnel or other departmental costs for marketing and creative services and/or advertising that FRANCHISOR internally administers or prepares; point of purchase and promotional materials and supplies, digital art, marketing and dissemination support mechanisms and the employment of outside agencies. All sums paid by FRANCHISEE to the Fund shall be maintained in a separate account from the other funds of FRANCHISOR and shall not be used to defray any of FRANCHISOR's general operating expenses. However the Fund may reimburse FRANCHISOR and its affiliates for the reasonable salaries and benefits of personnel who manage and administer the Fund or otherwise provide assistance or services to the Fund, the Fund's administrative costs, travel expenses while they are on Fund business, meeting costs, overhead relating to the Fund business and other expenses that FRANCHISOR may incur in administering or directing the Fund and its programs including conducting market research, preparing marketing and advertising materials, and collecting and accounting for assessments for the Fund. The Fund is not a trust, and FRANCHISOR does not owe FRANCHISEE fiduciary obligations because of FRANCHISOR'S maintaining, directing or administering the Fund or any other reason. The Fund may spend in any fiscal year more or less than the total Fund contributions in that year, borrow from FRANCHISOR or others (paying reasonable interest) to cover deficits, or invest any surplus for future use. FRANCHISOR will use all interest earned on Fund contributions to pay costs before using the Fund's other assets.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, the franchisor has sole discretion over the advertising fund. Specifically, Apricot Lane directs and approves all marketing and advertising programs, including creative concepts, materials, media, placement, and allocation. This means franchisees do not have the right to influence or control how the fund is used.
Apricot Lane may use the fund to cover various costs related to advertising, marketing, and promotional activities. These costs include preparing and producing mass media, digital advertising, direct mail, outdoor billboard advertising, public relations, website development, marketing personnel, point-of-purchase materials, and support mechanisms. The fund can also reimburse Apricot Lane and its affiliates for salaries, benefits, administrative costs, travel expenses, meeting costs, and overhead related to managing the fund.
It is important to note that the advertising fund is not a trust, and Apricot Lane does not owe franchisees any fiduciary obligations regarding the fund's management. Apricot Lane has the flexibility to spend more or less than the total contributions in a given year, borrow funds to cover deficits, or invest any surplus for future use. Any interest earned on fund contributions will be used to pay costs before using the fund's other assets.
While franchisees are required to contribute to the fund, they do not have the right to withhold payments based on their personal opinions of the advertising content or media placement. Franchisees are entitled to an annual accounting of the fund's operation upon request, although this accounting does not necessarily need to be audited by an independent certified public accountant unless Apricot Lane chooses to do so.