Can Bombs Away require franchisees to participate in promotional campaigns?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
instructions from Bombs Away Franchising or the vendor, supplier, or manufacturer of such item with respect to such item, including without limitation the recall, repair, and/or replacement of such item.
ARTICLE 9. MARKETING
- 9.1 Approval and Implementation. Franchisee shall not conduct any marketing, advertising or public relations activities (including websites, online advertising, social media marketing or presence, and sponsorships) that have not been approved by Bombs Away Franchising. Bombs Away Franchising may (but is not obligated to) operate all "social media" accounts on behalf of the System, or it may permit franchisees to operate one or more accounts. Franchisee must comply with any System Standards regarding marketing, advertising, and public relations, include any social media policy that Bombs Away Franchising may prescribe. Franchisee shall implement any marketing plans or campaigns determined by Bombs Away Franchising.
- 9.2 Use By Bombs Away Franchising. Bombs Away Franchising may use any marketing materials or campaigns developed by or on behalf of Franchisee, and Franchisee hereby grants an unlimited, perpetual, royalty-free license to Bombs Away Franchising for such purpose.
- 9.3 Marketing Fund. Bombs Away Franchising may establish a Marketing Fund to promote the System on a local, regional, national, and/or international level. If Bombs Away Franchising has established a Marketing Fund:
- (a) Separate Account. Bombs Away Franchising shall hold the Marketing Fund Contributions from all franchisees in one or more bank accounts separate from Bombs Away Franchising's other accounts.
- (b) Use. Bombs Away Franchising 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), and related overhead. The foregoing includes such activities
and expenses as Bombs Away Franchising 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;
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, franchisees are generally required to implement marketing plans and campaigns determined by Bombs Away. Specifically, Bombs Away can establish a Marketing Fund to promote the system, and franchisees may be required to contribute to this fund. The expenditures from the Marketing Fund do not need to be proportionate to the franchisee's contributions and will be spent at Bombs Away's sole discretion.
Bombs Away may also establish market advertising and promotional cooperative funds (Market Cooperatives) in certain geographical areas. If a Market Cooperative exists for the franchisee's territory, the franchisee must become a member. The Market Cooperative's activities are decided by a majority vote of its members, but Bombs Away is entitled to attend and participate in any meeting. If the members cannot agree on how to spend the Market Cooperative's money, Bombs Away may assume decision-making authority.
Franchisees are also required to spend at least 5% of gross sales each month on marketing the business, and must furnish proof of compliance upon request. Bombs Away has the sole discretion to determine what activities constitute "marketing" under this requirement, and may determine that contributions to a Market Cooperative count toward this spending requirement. Franchisees must also develop a market introduction plan and obtain Bombs Away's approval at least 30 days before opening.