What is the purpose of the advertising funds received from Bath Tune Up franchisees?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
| Depository Country | Insured By | Insured Deposit Maximum (Local Currency) | Insured Deposit Maximum (USD) | Uninsured Deposits (USD) | |-----------------------|-------------------------------------------------|------------------------------------------------------|----------------------------------------|--------------------------------| | United States | Federal Deposit Insurance Corporation (FDIC) | US$250,000 | $ 250,000 | $ 1,296,622 | | Canada | Canadian Deposit Insurance Corporation | C$100,000 | $ 69,520 | $ 683,089 | The Balance Sheets Cash balances also include advertising advances and deposits received from franchisees for the purpose of national advertising ("NAF") of $289,874 and $319,041 as of December 31, 2024 and 2023, respectively. The Company's policy is to designat
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 51–52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, the advertising funds collected from franchisees, referred to as the National Advertising Fund (NAF), are specifically designated to finance national and regional advertising initiatives. These advertising efforts are intended to benefit the Bath Tune Up franchisees. The funds are kept separate and restricted for these advertising purposes, and cannot be used for Bath Tune Up's own advertising related to franchise sales.
The funds are sales-based, meaning the amount each franchisee contributes is tied to their sales performance. Bath Tune Up recognizes this revenue as the franchisees earn sales. The franchise agreement allows Bath Tune Up to use a portion of the advertising deposits to cover the costs of administering the advertising fund.
As of December 31, 2024, Bath Tune-Up held $289,874 in NAF funds, and $319,041 as of December 31, 2023. These funds are earmarked in separate bank accounts, ensuring they are used exclusively for advertising costs that will benefit the franchisees, as stipulated in the franchise agreements.