Can Bombs Away require franchisees to use specific promotional materials?
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; market research; public relations, media or agency costs; trade shows and other events; printing and mailing;
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, franchisees must have marketing, advertising, or public relations activities approved by Bombs Away Franchising. Bombs Away Franchising can operate social media accounts for the system or allow franchisees to operate their own accounts, but franchisees must adhere to Bombs Away Franchising's system standards and social media policies. Franchisees are required to implement marketing plans or campaigns determined by Bombs Away Franchising. Bombs Away Franchising can also use marketing materials developed by or for the franchisee, with the franchisee granting an unlimited, perpetual, royalty-free license for such use.
Bombs Away Franchising may establish a Marketing Fund to promote the system at various levels, using contributions from franchisees for marketing, advertising, and public relations. A Market Cooperative can develop standardized promotional materials, but these require Bombs Away Franchising's prior approval. Franchisees are required to spend at least 5% of gross sales each month on marketing the business, and Bombs Away Franchising has the discretion to determine what activities qualify as marketing. Contributions to a Market Cooperative may count towards this required spending.
In summary, Bombs Away maintains significant control over marketing and promotional materials used by franchisees. This control ensures brand consistency and adherence to system standards. Franchisees must obtain approval for their marketing activities and implement franchisor-driven campaigns, which could limit their autonomy in local marketing efforts. The financial obligation to spend 5% of gross sales on marketing, coupled with the potential for mandatory contributions to a Marketing Fund or Market Cooperative, represents a substantial investment for franchisees. Prospective franchisees should carefully consider these requirements and their potential impact on their business operations and profitability.