What discretion does Aw have over the geographic placement of the Marketing Fund's advertising?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
ess to the Internet for communicating with and receiving information from us, and for on-line ordering for customers.
12. ADVERTISING
12.1 Marketing Fund. We administer a system-wide marketing fund ("Marketing Fund"). Your required contributions to the Marketing Fund are set forth in Paragraph 10.3 of this Agreement.
We will be entitled to direct all advertising, marketing and promotional programs financed by the Marketing Fund, with sole discretion over the creative concepts, materials, and endorsements used in them, and the geographic, market, and media placement and allocation of the programs. You agree that the Marketing Fund may be used to pay the costs of preparing and producing video, audio and written advertising materials; administering national, regional or local advertising programs including, without limitation, direct mail and other media advertising, and employing advertising agencies to assist in those activities; establishing and maintaining the Company Website; supporting public relations, market research and marketing activities; and providing advertising, marketing and promotional materials to Papa Ray's Pizza Restaurants. The Marketing Fund will furnish you with approved advertising, marketing and promotional materials at its direct cost of producing those materials.
The Marketing Fund will be a separate and distinct account and will be accounted for separately from the other funds of the Company and will not be used to defray any of our general operating expenses, except for any reasonable salaries, administrative costs and overhead we may incur in activities reasonably related to the administration of the Marketing Fund and its advertising, marketing and promotional programs (including, without limitation, conducting market research, preparing advertising, marketing and promotional materials, and collecting and accounting for contributions to the Marketing Fund).
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw has sole discretion over the geographic placement of advertising financed by the Marketing Fund. Aw is entitled to direct all advertising, marketing, and promotional programs that the Marketing Fund finances. This includes complete control over the creative concepts, materials, and endorsements used, as well as where the programs are placed geographically, in the market, and in the media.
This means that while franchisees contribute to the Marketing Fund, Aw ultimately decides how and where those funds are spent on advertising. Aw states that it will endeavor to use the Marketing Fund to develop advertising, marketing and promotional materials, and to place advertising in a manner that will benefit all Papa Ray's Pizza Restaurants. However, Aw does not guarantee that the expenditures will be proportionate or equivalent to the contributions from Papa Ray's Pizza Restaurants operating in any specific geographic area. Nor does Aw guarantee that any Papa Ray's Pizza Restaurant will benefit directly or in proportion to its contribution to the Marketing Fund from the development of advertising, marketing and promotional materials or the placement of advertising.
For a prospective Aw franchisee, this highlights the importance of understanding that contributions to the Marketing Fund do not guarantee direct or proportional advertising benefits in their specific area. Franchisees should be aware that Aw has the authority to allocate these funds as it sees fit to maximize recognition of the Marks and patronage of Papa Ray's Pizza Restaurants. Franchisees are also required to spend a minimum of $3,800.00 per month on local advertising, marketing and promotion throughout the term of the agreement.