Does Bombs Away Franchising have a fiduciary duty with regard to the Marketing Fund?

According to Bombs Away's 2024 Franchise Disclosure Document, Bombs Away Franchising does not have a fiduciary duty regarding the Marketing Fund. Franchisees contribute 2% of their gross sales to the Marketing Fund, and Bombs Away has sole discretion over how these funds are spent. This means Bombs Away is not legally obligated to act in the franchisees' best interests when managing the Marketing Fund.

Bombs Away Franchising can use the Marketing Fund for various purposes, including advertising, promotions, sponsorships, website development, social media, market research, and administrative expenses. These expenditures do not need to be proportionate to a franchisee's contributions, nor do they have to provide a direct benefit to each franchisee. Bombs Away Franchising can also accumulate funds in the Marketing Fund and carry the balance over to subsequent years.

While Bombs Away Franchising has broad discretion over the Marketing Fund, it will provide an unaudited annual financial statement of the Marketing Fund to franchisees upon request within 120 days of the close of Bombs Away Franchising's fiscal year. This provides some transparency, even though Bombs Away is not bound by a fiduciary duty. Franchisees should consider this lack of fiduciary duty and the broad discretion Bombs Away has when evaluating the franchise opportunity.