What is the purpose of the Bombs Away Marketing Fund?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
Section 5.5)
Advertising
Our obligation. We will use the Marketing Fund only for marketing and related purposes and costs. Media coverage is primarily local. We use outside vendors and consultants to produce advertising. We are not required to spend any amount of advertising in the area or territory where any particular franchisee is located. We will maintain the brand website (which may be paid for by the Marketing Fund). We have no other obligation to conduct advertising.
Your own advertising material. You may use your own advertising or marketing material only with our approval. To obtain our approval, you must submit any proposed advertising or marketing material at least 14 days prior to use. If we do not respond, the material is deemed rejected. If you develop any advertising or marketing materials, we may use those materials for any purpose, without any payment to you.
Advertising council. We do not have an advertising council composed of franchisees. The franchise agreement does not give us the power to form an advertising council.
Local or Regional Advertising Cooperatives. We do not currently have any local or regional advertising cooperatives. We have the right to require you to participate in a local or regional advertising cooperative. We will define the area of the cooperative based on media markets, or other geographic criteria that we deem appropriate. Each franchisee in the area would have one vote per outlet (unless the franchisee is in default under its franchise agreement)
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, the Marketing Fund is to be used for marketing and related costs. Bombs Away franchisees are required to contribute 2% of their gross sales per month to the Marketing Fund, although Bombs Away retains the right to have other franchisees contribute a different amount or rate. Bombs Away-owned outlets are not obligated to contribute to the Marketing Fund.
The fund is administered by Bombs Away, and is not audited. However, Bombs Away will make unaudited annual financial statements available to franchisees upon request. Any unspent funds in a fiscal year will remain in the Marketing Fund for use in the next year.
Notably, the FDD states that no money from the Marketing Fund is spent principally to solicit new franchise sales. Given that Bombs Away is a new franchisor, no money was spent from the Marketing Fund in the most recently concluded fiscal year. Franchisees should note that they are also required to spend at least 5% of gross sales each month on local marketing for their business, separate from the 2% contribution to the Marketing Fund.