Which items in the Better Blend Disclosure Document relate to advertising?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]
| Obligation | Section in agreement | Disclosure document item | |
|---|---|---|---|
| o. Advertising | Article 9 | Items 6, 7, 8 and 11 |
Advertising
Our obligation. We will use the Marketing Fund only for marketing and related purposes and costs. Media coverage is primarily local. We use outside vendors and consultants to produce
advertising. We are not required to spend any amount of advertising in the area or territory where any particular franchisee is located. We will maintain the brand website (which may be paid for by the Marketing Fund). We have no other obligation to conduct advertising.
Your own advertising material. You may use your own advertising or marketing material only with our approval. To obtain our approval, you must submit any proposed advertising or marketing material at least 14 days prior to use. If we do not respond, the material is deemed rejected. If you develop any advertising or marketing materials, we may use those materials for any purpose, without any payment to you. We have the right to establish and control all social media accounts and other digital marketing. You must ensure that all advertising or marketing materials that you use are clear, factual, ethical, and not misleading; comply with our brand standards; and comply with all laws.
Advertising council. We do not have an advertising council composed of franchisees. The franchise agreement does not give us the power to form an advertising council.
Local or Regional Advertising Cooperatives. We do not currently have any local or regional advertising cooperatives. We have the right to require you to participate in a local or regional advertising cooperative. We will define the area of the cooperative based on media markets, or other geographic criteria that we deem appropriate. Each franchisee in the area would have one vote per outlet (unless the franchisee is in default under its franchise agreement). The amount you must contribute to the cooperative will be determined by vote of the members, but not less than 1% and not more than 5% of adjusted gross sales. If our own outlets are members of a cooperative, they must contribute to the cooperative on the same basis as franchisees, and they will vote on the same basis as other members. We administer the cooperative, but we have the right to delegate responsibility for administration to an outside company such as an advertising agency or accounting firm, or to the franchisee members of the cooperative. We have the right to require the cooperative to operate from written bylaws or other governing documents that we determine. The documents are not currently available for you to review. Cooperatives will prepare annual financial statements which will be made available for review only by us and by the members of the cooperative. We have the power to require cooperatives to be formed, changed, dissolved, or merged.
Marketing Fund. You and all other franchisees must contribute to our Marketing Fund. Your contribution is 1% of adjusted gross sales per week. We have the right raise contributions to 2% of adjusted gross sales per week. We reserve the right to have other franchisees contribute a different amount or at a different rate. Outlets that we own are not obligated to contribute to the Marketing Fund. We administer the Fund. The Fund is not audited. We will make unaudited annual financial statements available to you upon request.
Market introduction plan. You must develop a market introduction plan and obtain our approval of the plan at least 30 days before the projected opening date of your business.
Required spending. After you open, you must spend at least 2% of adjusted gross sales each month on marketing your business. This amount is only a minimum requirement, and we do not represent that it is the optimal amount of money for you to spend on marketing.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 21–27)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, several items pertain to advertising. Item 11 generally discusses the franchisor's assistance, advertising, computer systems, and training. Specifically, Article 9 of the franchise agreement, which covers advertising, is further detailed in Items 6, 7, 8, and 11 of the disclosure document.
Better Blend requires franchisees to contribute to a Marketing Fund, with contributions set at 1% of adjusted gross sales per week, but the franchisor retains the right to increase this to 2%. These funds are to be used for marketing and related costs, with media coverage primarily focused locally. The franchisor also maintains the brand's website, potentially funded by the Marketing Fund. However, Better Blend is not obligated to spend any specific amount on advertising in any particular franchisee's area.
Franchisees must also develop a market introduction plan for approval by Better Blend at least 30 days before opening. After opening, franchisees are required to spend a minimum of 2% of adjusted gross sales each month on local marketing. Any advertising or marketing materials created by the franchisee are subject to Better Blend's approval, and the franchisor has the right to use these materials without compensation. Better Blend also retains control over all social media accounts and digital marketing efforts.
Better Blend does not have an advertising council composed of franchisees, nor does the franchise agreement grant the power to form one. However, Better Blend has the right to require participation in local or regional advertising cooperatives, where contributions would be determined by the members, set between 1% and 5% of adjusted gross sales. The franchisor also has the power to form, change, dissolve, or merge these cooperatives.