Does Azal Coffee specify that the minimum local advertising requirement is separate from obligations for grand opening advertising?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
You must spend a minimum of 1% of Gross Sales each month for advertising in your local market. You must provide us with documentation, at the times and in the form and manner specified by us, to prove that you spent the required amount on local advertising, or in our discretion, we may require you to pay the minimum local advertising amounts to us for advertising in your local market. If we require you to pay the minimum local advertising amounts to us, we may use these amounts, in our discretion, for local advertising and promotion for you (including but not limited to Digital Advertising, flyers, promotions, mailers, etc.) or as part of joint advertising or cooperative advertising. If you fail to pay these amounts in your local market, you are required to remit the amounts to us as additional royalty. Your minimum local advertising requirement is separate from and in addition to your obligations for grand opening advertising and for contributions to the marketing fund. If we require you to pay the minimum local advertising
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 minimum local advertising requirement is separate from grand opening advertising. Azal Coffee franchisees must spend a minimum of 1% of gross sales each month on local advertising. Franchisees must provide documentation to Azal Coffee as proof of these advertising expenditures. If a franchisee fails to provide proof of local advertising spending, Azal Coffee has the discretion to require the franchisee to pay the minimum local advertising amounts to them directly. Azal Coffee may then use these funds for local advertising and promotion, including digital advertising, flyers, promotions, and mailers, or as part of joint or cooperative advertising efforts.
If Azal Coffee requires the franchisee to pay the minimum local advertising amounts to them, Azal Coffee will submit an annual report of receipts and disbursements of those amounts upon request. This report may be unaudited and prepared by Azal Coffee. The 1% minimum local advertising requirement is separate from and in addition to obligations for grand opening advertising and contributions to the marketing fund.
This means that franchisees must budget separately for these three distinct advertising expenses: local advertising (at least 1% of gross sales), grand opening advertising, and any contributions to the marketing fund. This is a typical arrangement in franchising, where franchisees are often required to contribute to various advertising and marketing efforts to promote their individual businesses and the brand as a whole.