Who is responsible for the administration, costs, and expenses of each advertising cooperative for Azal Coffee franchises?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
You must make contributions to the marketing fund as provided in Section 4.3. You acknowledge and agree that we are not obligated to implement a marketing fund or to continue a marketing fund, if implemented, and may suspend contributions to or operations of the marketing fund or terminate the marketing fund (or reinstate the marketing fund if it is terminated). We will administer and control the marketing fund in our sole discretion. We may use the marketing fund to: maximize general public recognition and patronage of the Franchise Marks and Azal Coffee Stores; formulate, develop and produce marketing, advertising, and sales support materials for use by 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" (defined in Section 9.7) for us and/or franchisees; obtain public relations services; obtain marketing and advertising services from third parties to administer, create, distribute, place, publish, or otherwise provide marketing products and services to the marketing fund and to develop and implement Franchise Technology and Digital Marketing; 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 determined in our discretion.
We are not required to spend your marketing fund contributions to place advertising in your market or in any specific media. The marketing fund will be used to pay all expenses of the marketing fund. We will submit to you, on request, an annual report of the receipts and disbursements of the marketing fund, which may be unaudited and prepared by us.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, Azal Coffee does not detail the existence or structure of advertising cooperatives. Instead, the document describes a marketing fund that Azal Coffee controls and administers.
According to the FDD, Azal Coffee has sole discretion over the marketing fund. They are responsible for administering and controlling the fund, deciding how it will be used to promote the Azal Coffee brand. This includes creating advertising materials, conducting promotional programs, providing marketing support, and developing digital marketing strategies.
The expenses of the marketing fund, including salaries for marketing staff, administrative costs, and overhead, are paid from the fund itself. Azal Coffee is not obligated to spend contributions in any specific market or media. While Azal Coffee will provide an annual report of the fund's receipts and disbursements upon request, this report may be unaudited and prepared by Azal Coffee.
Prospective franchisees should inquire with Azal Coffee about the existence of advertising cooperatives, how they are managed, and what financial obligations franchisees would have to these cooperatives, as this information is not clearly outlined in the provided FDD excerpts.