Can Azal Coffee change the amount or suspend contributions to the marketing fund?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
We currently collect 1% of Gross Sales and reserve the right to require that you make periodic contributions to a marketing fund in an amount of up to 3% of your Gross Sales. We are not obligated to implement a marketing fund or to continue the marketing fund, if implemented, and may change the amount or suspend contributions to or operations of the marketing fund or terminate the marketing fund (or reinstate the marketing fund if it is terminated). We intend that all Azal Coffee franchises will contribute to the marketing fund at the same rate. We further intend that our corporate and affiliate owned Stores will contribute to the marketing fund on the same basis as franchisees.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 27–36)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, Azal Coffee has the right to modify or suspend contributions to the marketing fund. Currently, franchisees contribute 1% of Gross Sales, and Azal Coffee reserves the right to require contributions of up to 3% of Gross Sales.
Azal Coffee is not obligated to implement a marketing fund or continue it if implemented. They can change the contribution amount, suspend contributions, or terminate the fund entirely, and reinstate it if terminated. Azal Coffee intends for all Azal Coffee franchises, including corporate and affiliate-owned stores, to contribute to the marketing fund at the same rate.
This flexibility allows Azal Coffee to adjust its marketing strategy and spending based on current market conditions or the overall financial health of the franchise system. However, it also means that franchisees face uncertainty regarding the stability and level of marketing support they can expect from the franchisor. Prospective franchisees should consider this when evaluating the potential benefits of the Azal Coffee franchise and factor in the possibility of fluctuating marketing fund contributions.