Can Better Blend use the Marketing Fund for overhead expenses?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- (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.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, Better Blend has the discretion to use the Marketing Fund for overhead expenses. Specifically, Better Blend is permitted to use the fund for marketing, advertising, and public relations activities related to Better Blend, which includes related overhead.
This means that franchisee contributions to the Marketing Fund may be used for a broad range of expenses that Better Blend deems reasonable. These expenses can include the development and placement of advertising, sponsorships, contests, branding, website maintenance, social media, e-commerce, search engine optimization, public relations, trade shows, printing, mailing, and administrative overhead. The administrative and overhead expenses can also include compensation for Better Blend's employees working on marketing, as well as accounting, bookkeeping, reporting, legal, and collection expenses related to the Marketing Fund.
Better Blend's FDD states that the expenditures from the Marketing Fund do not need to be proportionate to a franchisee's contributions, nor do they have to provide any direct or indirect benefit to the franchisee. Better Blend has sole discretion over how the Marketing Fund is spent and does not have a fiduciary duty regarding the fund. This gives Better Blend significant control over the Marketing Fund and how it is used.