Does Bath Tune Up have a fiduciary obligation to franchisees regarding the National Advertising Fund?

According to Bath Tune Up's 2025 Franchise Disclosure Document, Bath Tune Up does not have a fiduciary obligation to franchisees regarding the National Advertising Fund. The FDD states clearly that the National Advertising Fund is not a trust or escrow account, and Bath Tune Up explicitly disclaims any fiduciary duty to its franchisees concerning the Fund. This means that Bath Tune Up has considerable discretion in how the fund is managed and spent.

Bath Tune Up collects a National Advertising Fee from franchisees, which is the greater of 1% of the franchisee's monthly Gross Revenue or $500, but can increase to 2% of Gross Revenue. These fees are contributed to the National Advertising Fund, which Bath Tune Up uses for national, regional, local advertising, and public relations programs. Bath Tune Up has the sole discretion to decide what is necessary or appropriate for promoting and protecting the Bath Tune Up system.

While the funds must be accounted for separately from Bath Tune Up's other funds, they can be used to cover reasonable salaries for activities related to advertising and promotional programs, as well as an administrative fee of 15% of the annual aggregate National Advertising Fees received. Franchisees should be aware that Bath Tune Up is not obligated to ensure that any particular franchisee benefits directly or proportionally from the advertising and promotion efforts funded by the National Advertising Fund. However, Bath Tune Up will deliver a summary statement of receipts and expenditures of the Fund relating to the preceding calendar year, certified to be correct by an officer of Bath Tune Up, if requested in writing by the franchisee on or before March 31 of each year.