Is the Bens Soft Pretzels Advertising Fund a trust or escrow account?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the right to designate local advertising markets and if designated, you must participate in and contribute to the cooperative advertising and marketing programs in your designated local advertising market.
If established, you must contribute to the advertising cooperative the amount designated by the cooperative.
Each BEN'S SOFT PRETZELS store, including those operated by us or our affiliates within a designated local advertising area (except Special Sites) is a member of the local advertising cooperative and each store has one vote on all matters requiring a vote.
Each advertising cooperative will be required to adopt governing bylaws that meet our approval.
You must obtain our written approval of all promotional and advertising materials, creative execution and media schedules prior to their implementation.
Each advertising cooperative will be required to prepare annual financial statements, which must be made available to all members of the cooperative and to us upon request.
Also, each advertising cooperative must submit to us its meeting minutes upon our request. We have the right to require advertising cooperatives to be formed, changed, dissolved or merged.
Source: Item 22 — CONTRACTS (FDD pages 46–47)
What This Means (2025 FDD)
Based on the 2025 Bens Soft Pretzels Franchise Disclosure Document, it is not explicitly stated whether the advertising fund is held in a trust or escrow account. However, the FDD does provide some information regarding advertising cooperatives. Franchisees may be required to participate in and contribute to cooperative advertising and marketing programs in their designated local advertising market. The amount of contribution is determined by the cooperative. Each Bens Soft Pretzels store, including those operated by the company or its affiliates (except Special Sites), within a designated local advertising area is a member of the local advertising cooperative and has one vote on all matters requiring a vote. Each advertising cooperative is required to adopt governing bylaws that meet the company's approval. Franchisees must obtain written approval of all promotional and advertising materials, creative execution, and media schedules prior to their implementation. Each advertising cooperative is required to prepare annual financial statements, which must be made available to all members of the cooperative and to the company upon request. Also, each advertising cooperative must submit its meeting minutes upon the company's request. The company has the right to require advertising cooperatives to be formed, changed, dissolved, or merged.
Because the FDD does not specify whether the advertising funds are held in a trust or escrow account, prospective franchisees should seek clarification from Bens Soft Pretzels regarding the specific structure and management of the advertising fund. Understanding how these funds are managed and protected is crucial for making an informed investment decision. It is also important to understand the financial oversight and reporting mechanisms in place for the advertising fund.
In the absence of explicit details in the FDD, potential franchisees should ask Bens Soft Pretzels for additional documentation or explanations about the advertising fund's governance, including information on how the funds are collected, managed, and disbursed. This information will help franchisees understand their rights and obligations regarding advertising contributions and ensure transparency in the use of these funds.