Are Better Blend owned outlets obligated to contribute to the Marketing Fund?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 21–27)
What This Means (2024 FDD)
According to the 2024 Better Blend Franchise Disclosure Document, franchisee-owned outlets are required to contribute to the Marketing Fund, while company-owned outlets are not. Franchisees must contribute 1% of adjusted gross sales weekly, and Better Blend retains the right to increase this contribution to 2%.
This policy creates a potential disparity between franchisees and the franchisor. Franchisees are obligated to contribute to the Marketing Fund, which supports the Better Blend brand, while Better Blend-owned outlets are exempt from this requirement. This could lead to concerns among franchisees about the equitable distribution of costs and benefits within the franchise system.
Prospective franchisees should consider this difference in contribution obligations when evaluating the financial aspects of the Better Blend franchise. It would be prudent to inquire about the number of company-owned outlets versus franchisee-owned outlets and the overall impact of this policy on the Marketing Fund's resources and expenditures. Understanding how the Marketing Fund is managed and how it benefits all outlets, regardless of ownership, is crucial for making an informed investment decision.