What general operating expenses can the Aw Marketing Fund be used for?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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). We may spend in any fiscal year an amount greater or less than the total contribution of Papa Ray's Pizza Restaurants to the Marketing Fund in that year. We may cause the Marketing Fund to borrow from us or other lenders to cover deficits of the Marketing Fund or cause the Marketing Fund to invest any surplus for future use by the Marketing Fund. All interest earned on monies contributed to the Marketing Fund will be used to pay advertising, marketing and promotional costs of the Marketing Fund before other assets of the Marketing Fund are expended. We will prepare an annual statement of monies collected and costs incurred by the Marketing Fund and will furnish it to you on written request.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the Marketing Fund can be used to cover the costs of preparing and producing advertising materials, administering advertising programs, employing advertising agencies, maintaining the company website, supporting public relations and market research, and providing promotional materials to Aw restaurants. The fund is intended to maximize recognition of Aw's brand and patronage of its restaurants. While Aw aims to use the Marketing Fund in a way that benefits all restaurants, there's no guarantee that expenditures in any specific area will be proportional to the contributions from restaurants in that area.
Aw clarifies that the Marketing Fund is a separate account from the company's other funds. It is not to be used for Aw's general operating expenses. However, the fund can be used to cover reasonable salaries, administrative costs, and overhead that Aw incurs while administering the Marketing Fund and its advertising programs. This includes conducting market research, preparing advertising materials, and managing contributions to the fund.
Prospective Aw franchisees should note that Aw may spend more or less than the total contributions to the Marketing Fund in any given year. Aw also has the option to borrow or invest funds to cover deficits or for future use. Any interest earned on the Marketing Fund will be used to pay for advertising and promotional costs before other assets are used. Aw will provide an annual statement of the Marketing Fund's finances to franchisees upon written request, offering transparency into how the funds are being managed.