What are some potential uses of the Azal Coffee marketing fund?
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.
We intend to spend marketing fund fees contributed to the marketing fund during the fiscal year in which the contributions are made, taking into account reserves for advertising promotions and campaigns, repayment of debt, and other business needs in the next fiscal year. If we spend less than the total amount of funds available in the marketing fund during any fiscal year, we will spend the unused funds during a future fiscal year. If we spend an amount greater than the amount available to the marketing fund, and we have contributed the additional amounts to the marketing fund, we will be entitled to be reimbursed by the marketing fund for all those excess expenditures.
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, which is administered and controlled by Azal Coffee or an entity they designate, can be used for several purposes. These include maximizing public recognition and patronage of the Franchise Marks and Stores, formulating and producing marketing and advertising materials for franchisees, and conducting marketing and promotional programs at the national, regional, or local level. Azal Coffee may also use the fund to provide marketing support services to franchisees and to develop, maintain, and support franchise technology and digital marketing.
Further, the marketing fund can be used to obtain public relations and marketing/advertising services, covering the costs to administer, create, distribute, place, publish, or otherwise provide marketing products and services. The fund can also cover its own expenses, such as salaries and employment costs for Azal Coffee's marketing staff, administrative costs, overhead, and other related expenses. The document also allows for other uses as Azal Coffee determines at its discretion.
It is important to note that Azal Coffee is not required to spend a franchisee's contributions in their specific market or in any specific media. All expenses of the marketing fund will be paid from the fund itself, and it will not be used for marketing that primarily solicits the sale of franchises. Franchisees can request an annual report of the fund's receipts and disbursements, which will be an unaudited report prepared by Azal Coffee's management. Azal Coffee intends to spend the fees contributed to the marketing fund during the fiscal year in which the contributions are made, while also considering reserves for advertising promotions and campaigns, debt repayment, and other business needs in the next fiscal year. Any unspent funds will be used in future fiscal years, and Azal Coffee is entitled to reimbursement from the fund for any excess expenditures they contribute.