What is the purpose 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 is intended to maximize public recognition and patronage of the Azal Coffee brand and stores. The fund may be used to create marketing and advertising materials for franchisees, conduct advertising programs at the national, regional, or local level, and provide marketing support services to franchisees. It also supports the franchise technology and digital marketing efforts for both the franchisor and its franchisees. The fund can cover public relations, marketing, and advertising services, as well as the administrative expenses associated with managing the fund, including salaries and overhead. The franchisor has the discretion to determine other uses for the fund as well.
Azal Coffee, its affiliates, or another designated entity will manage the marketing fund. While franchisees contribute to the fund, the franchisor is not obligated to spend those contributions specifically in the franchisee's market or in any particular media outlet. All expenses of the marketing fund will be paid from the marketing fund, and the marketing fund will not be used for marketing that is principally a solicitation for the sale of franchises.
Azal Coffee will provide an annual report of the marketing fund's receipts and disbursements upon request, though the report will be unaudited and prepared by the company's management. The franchisor intends to spend the fees contributed to the marketing fund during the fiscal year in which they are collected, while also considering reserves for future advertising promotions, debt repayment, and other business needs. Any unspent funds will be used in future fiscal years, and the franchisor is entitled to reimbursement from the fund for any excess expenditures they contribute.