Does Aw have the right to discontinue or reestablish the Marketing Fund?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
Recognizing the value of advertising and marketing to the goodwill and public image of Papa Ray's Pizza Restaurants, we intend to establish, maintain and administer an advertising, marketing and promotional fund (the "Marketing Fund") for such advertising, marketing and promotions as we may deem necessary or appropriate in our sole discretion.
You agree to contribute to the Marketing Fund two percent (2%) of the Gross Revenue (as defined below) of the Papa Ray's Pizza Restaurant.
We have the right to discontinue or reestablish the Marketing Fund upon sixty (60) days advance notice to you.
In the event we discontinue the Marketing Fund, we will distribute all unspent amounts existing in the Marketing Fund on the date of discontinuance to franchisees in proportion to their respective contributions for the most recent six (6) months.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw has the right to discontinue or reestablish the Marketing Fund. Aw must provide franchisees with sixty (60) days advance notice before discontinuing or reestablishing the Marketing Fund. If Aw discontinues the Marketing Fund, the remaining unspent funds will be distributed to franchisees. The distribution will be in proportion to each franchisee's contributions to the Marketing Fund over the most recent six (6) months.
This clause gives Aw flexibility in managing the Marketing Fund, but also ensures that franchisees receive back any unspent funds should the Marketing Fund be discontinued. Franchisees contribute two percent (2%) of their Gross Revenue to the Marketing Fund, so the return of unspent funds could be a significant amount, depending on the size of the fund at the time of discontinuance.
It is typical in franchising for franchisors to have the ability to modify or discontinue marketing funds, as market conditions and advertising strategies may change over time. The requirement to provide advance notice and distribute unspent funds is a protective measure for franchisees, ensuring they are informed of changes and receive a fair return of their contributions. Prospective franchisees should consider the potential impact of changes to the Marketing Fund when evaluating the Aw franchise opportunity.