factual

Can the Azal Coffee marketing fund be used for overhead expenses?

Azal_Coffee Franchise · 2024 FDD

Answer from 2024 FDD Document

We or an affiliate or other entity designated by us will administer and control the marketing fund. We may use the marketing fund to maximize general public recognition and patronage of the Franchise Marks and Stores; formulate, develop, and produce marketing, advertising and sales support materials for use by our franchisees; conduct marketing, advertising and promotional programs on a national, regional or local level; provide marketing support services to franchisees; develop, maintain and support the franchise technology and Digital Marketing (as defined in the Franchise Agreement) for us and our franchisees; obtain public relations services; obtain marketing and advertising services to administer, create, distribute, place, publish, or otherwise provide marketing products and services to the marketing fund; pay the expenses of the marketing fund, including without limitation, salaries and other employment expenses of our marketing staff, administrative costs, overhead, and other expenses we incur in connection with the administration of the marketing fund; and other uses as we determine at our discretion. We are not required to spend your marketing fund contributions to place advertising in your market or in any specific media. All expenses of the marketing fund will be paid from the marketing fund. The marketing fund will not be used for marketing that is principally a solicitation for the sale of franchises. We will submit to you, on request, an annual report of the receipts and disbursements of the marketing fund, unaudited, prepared by our management, and provided in the manner we specify.

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, the marketing fund can be used for overhead expenses. Azal Coffee, or an affiliate, will administer the marketing fund, which is intended to maximize recognition of the franchise.

The marketing fund can be used to formulate marketing and advertising materials, conduct advertising programs, provide marketing support, maintain franchise technology and digital marketing, obtain public relations services, and pay for marketing and advertising services.

Specifically, the marketing fund can cover expenses such as salaries and employment expenses for Azal Coffee's marketing staff, administrative costs, overhead, and other expenses related to administering the fund. All expenses of the marketing fund will be paid from the marketing fund. The marketing fund will not be used for marketing that is principally a solicitation for the sale of franchises.

Azal Coffee intends to spend the marketing fund fees during the fiscal year in which the contributions are made, while also considering reserves for advertising promotions, debt repayment, and other business needs for the next fiscal year. Franchisees may request an annual report of the receipts and disbursements of the marketing fund, which will be an unaudited report prepared by Azal Coffee's management.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.