Will the Aw Marketing Fund be a separate account from the company's other funds?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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 will be a separate and distinct account from the company's other funds. This means that the money contributed by franchisees for marketing purposes will be kept separate from Aw's general operating funds. This arrangement is intended to ensure that the contributions are used specifically for advertising, marketing, and promotional programs.
Aw has discretion over the creative concepts, materials, endorsements, and the geographic, market, and media placement of these programs. The Marketing Fund can be used to cover various costs, such as preparing advertising materials, administering advertising programs, maintaining the company website, supporting public relations, and providing promotional materials to Papa Ray's Pizza Restaurants. Aw can use the fund to pay for reasonable salaries, administrative costs, and overhead related to managing the Marketing Fund.
Aw may spend more or less than the total contributions from Papa Ray's Pizza Restaurants in any given fiscal year. The company can also borrow from lenders or invest any surplus for future use by the Marketing Fund. Any interest earned on the Marketing Fund will be used to cover advertising, marketing, and promotional costs before using other assets of the fund. Aw will provide an annual statement of monies collected and costs incurred by the Marketing Fund to franchisees upon written request.
If Aw discontinues the Marketing Fund, any unspent amounts will be distributed to franchisees in proportion to their contributions over the most recent six months. This ensures that franchisees receive a fair return of any remaining funds should the Marketing Fund be terminated.