Can the Azal Coffee marketing fund be used to pay administrative costs?
Azal_Coffee Franchise · 2024 FDDAnswer 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 to cover administrative costs. Azal Coffee, or an entity they designate, will manage the marketing fund.
The marketing fund can be used to increase public recognition of Azal Coffee, create marketing materials, conduct advertising programs, support franchisees with marketing, maintain franchise technology and digital marketing, obtain public relations and marketing services, and pay for the fund's expenses. These expenses include salaries and employment costs for Azal Coffee's marketing staff, administrative costs, overhead, and other expenses related to managing the marketing fund.
All expenses of the marketing fund will be paid from the marketing fund. Azal Coffee will provide an annual report of the marketing fund's receipts and disbursements upon request. The marketing fund will not be used to solicit franchise sales.