Are Bombs Away owned outlets obligated to contribute to the Marketing Fund?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
Advertising Fund. You and all other franchisees must contribute to our Marketing Fund. Your contribution is 2% of gross sales per month. 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.
Because we are a new franchisor, we did not spend any money from the Marketing Fund in our most recently concluded fiscal year.
If less than all marketing funds are spent in the fiscal year in which they accrue, the money will remain in the Marketing Fund to be spent in the next year.
No money from the Marketing Fund is spent principally to solicit new franchise sales.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 18–23)
What This Means (2024 FDD)
According to the 2024 Bombs Away Franchise Disclosure Document, franchisee-owned outlets are required to contribute to the Marketing Fund, but company-owned outlets are not. Franchisees must contribute 2% of gross sales per month to the Marketing Fund. However, Bombs Away retains the right to have different franchisees contribute different amounts or at different rates. The Marketing Fund is administered by Bombs Away, and while it is not audited, unaudited annual financial statements are available to franchisees upon request.
As a new franchisor, Bombs Away did not spend any money from the Marketing Fund in its most recently concluded fiscal year. Any unspent funds will remain in the Marketing Fund for use in subsequent years. The FDD specifies that no money from the Marketing Fund is used to solicit new franchise sales.
In addition to contributing to the Marketing Fund, franchisees may be required to participate in local or regional advertising cooperatives. If Bombs Away's own outlets are members of a cooperative, they must contribute to the cooperative on the same basis as franchisees and vote on the same basis as other members. The amount franchisees must contribute to the cooperative will be determined by a vote of the members, but not less than 1% of gross sales and not more than 5% of gross sales.