Is Better Blend required to establish a Marketing Fund?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
s, plans or campaigns (including Digital Marketing) required by BBF.
- 9.4 Use by BBF. BBF may use any Advertising and Promotional Content developed by or on behalf of Franchisee, and Franchisee hereby grants an unlimited, perpetual, royalty-free license to BBF for such purpose.
- 9.5 Marketing Fund. BBF has established or may establish a Marketing Fund to promote the System on a local, regional, national, and/or international level. If BBF has established a Marketing Fund:
- (a) Account. BBF is not required to hold the Marketing Fund Contributions in a bank account separate from BBF's other accounts.
- (b) Use. BBF shall use the Marketing Fund only for marketing, advertising, and public relations materials, programs and campaigns (including at local, regional, national, and/or international level) for Better Blend, and related overhead. The foregoing includes such activities and expenses as BBF reasonably determines, and may include, without limitation: development and placement of advertising and promotions; sponsorships; contests and sweepstakes; development of décor, trade dress, Marks, and/or branding; development and maintenance of brand websites; social media; internet activities; e-commerce programs; search engine optimization; market research; public relations, media or agency costs; trade shows and other events; printing and mailing; and administrative and overhead expenses related to the Marketing Fund (including the compensation of BBF's employees working on marketing and for accounting, bookkeeping, reporting, legal, collections, and other expenses related to the Marketing Fund).
- (c) Discretion. Franchisee agrees that expenditures from the Marketing Fund need not be proportionate to contributions made by Franchisee or provide any direct or indirect benefit to Franchisee. The Marketing Fund will be spent at BBF's sole discretion, and BBF has no fiduciary duty with regard to the Marketing Fund.
- (d) Contribution by Other Outlets. BBF is not obligated to (i) have all other Better Blend businesses (whether owned by other franchisees or by BBF or its affiliates) contribute to the Marketing Fund, or (ii) have other Better Blend businesses that do contribute to the Marketing Fund contribute the same amount or at the same rate as Franchisee.
- (e) Surplus or Deficit. BBF may accumulate funds in the Marketing Fund and carry the balance over to subsequent years. If the Marketing Fund operates at a deficit or requires additional funds at any time, BBF may loan such funds to the Marketing Fund on reasonable terms.
- (f) Financial Statement.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, Better Blend has established or may establish a Marketing Fund to promote the System on a local, regional, national, and/or international level. However, Better Blend is not required to have a Marketing Fund. If Better Blend has established a Marketing Fund, it is not required to hold the Marketing Fund Contributions in a bank account separate from Better Blend's other accounts.
If a Marketing Fund exists, Better Blend will use it only for marketing, advertising, and public relations materials, programs, and campaigns for Better Blend, and related overhead. This includes activities and expenses that Better Blend reasonably determines, such as development and placement of advertising and promotions; sponsorships; contests and sweepstakes; development of décor, trade dress, Marks, and/or branding; development and maintenance of brand websites; social media; internet activities; e-commerce programs; search engine optimization; market research; public relations, media or agency costs; trade shows and other events; printing and mailing; and administrative and overhead expenses related to the Marketing Fund (including the compensation of BBF's employees working on marketing and for accounting, bookkeeping, reporting, legal, collections, and other expenses related to the Marketing Fund).
Better Blend has sole discretion over how the Marketing Fund is spent, and expenditures do not need to be proportionate to a franchisee's contributions or provide any direct or indirect benefit to the franchisee. Better Blend also has no fiduciary duty with regard to the Marketing Fund. Better Blend is not obligated to have all Better Blend businesses contribute to the Marketing Fund, or to have those that do contribute, contribute the same amount or at the same rate as the franchisee.
Better Blend may accumulate funds in the Marketing Fund and carry the balance over to subsequent years. If the Marketing Fund operates at a deficit or requires additional funds, Better Blend may loan such funds to the Marketing Fund on reasonable terms. Better Blend will prepare an unaudited annual financial statement of the Marketing Fund within 120 days of the close of Better Blend's fiscal year and will provide the financial statement to the franchisee upon written request.