What happens if the Bombs Away Marketing Fund operates at a deficit?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- (e) Surplus or Deficit.
Bombs Away Franchising 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, Bombs Away Franchising may loan such funds to the Marketing Fund on reasonable terms.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, if the Marketing Fund operates at a deficit or requires additional funds, Bombs Away Franchising has the option to loan funds to the Marketing Fund. The terms of this loan would be considered reasonable.
This means that Bombs Away is not obligated to cover a deficit in the Marketing Fund through other means, such as increasing franchisee contributions or reducing marketing activities. Instead, they may choose to provide a loan to cover the shortfall.
As a Bombs Away franchisee, it's important to understand that the Marketing Fund is managed at the discretion of Bombs Away Franchising, and they have no fiduciary duty regarding the fund. While a loan may cover a deficit, franchisees should inquire about the potential implications of such a loan, including how it might affect future marketing fund contributions or activities.