What is the 'Marketing Fund' for Buona franchises?

your Franchise Agreement for your failure to open your Buona Business within the required time period.

Advertising

Once established, we will administer a system-wide brand marketing fund ("Marketing Fund"). You will contribute to the Marketing Fund as described in Item 6. All franchisees will contribute to the Marketing Fund on the same basis. Restaurants owned by our affiliate do not contribute to the Marketing Fund.

We will be entitled to direct all advertising, marketing and promotional programs financed by the Marketing Fund, with sole discretion over the creative concepts, materials, and endorsements used in them, and the geographic, market, and media placement and allocation of the programs. You agree that the Marketing Fund may be used to pay the costs of preparing and producing video, audio and written advertising materials; administering national, regional or local advertising programs including, without limitation, direct mail and other media advertising, and employing advertising agencies to assist in those activities; establishing and maintaining the Buona Website; internet-based advertising and marketing programs, developing and maintaining other presence on the Internet, including reputation management and systemwide online programs for customer ordering and loyalty rewards program; intranet development supporting public relations; market research and marketing activities; providing advertising, marketing and promotional materials to Buona Businesses; and any and all other activities for the purpose of promoting the Marks and Buona Businesses. The Marketing Fund will furnish you with approved advertising, marketing and promotional materials at its direct cost of producing those materials.

The Marketing Fund will be a separate and distinct account and will be accounted for separately from the our other funds and will not be used to defray any of our general operating expenses, except for any reasonable salaries, administrative costs and overhead we may incur in activities reasonably related to the administration of the Marketing Fund and its advertising, marketing and promotional programs (including, without limitation, conducting market research, preparing advertising, marketing and promotional materials, and collecting and accounting for contributions to the Marketing Fund). We may spend in any fiscal year an amount greater or less than the total contribution of Buona Businesses to the Marketing Fund in that year. We may cause the Marketing Fund to borrow from us or other lenders to cover deficits of the Marketing Fund or cause the Marketing Fund to invest any surplus for future use by the Marketing Fund. All interest earned on monies contributed to the Marketing Fund will be used to pay advertising, marketing and promotional costs of the Marketing Fund before other assets of the Marketing Fund are expended. We will prepare an annual unaudited statement of monies collected and costs incurred by the Marketing Fund and will furnish it to you on written request.

You understand and acknowledge that the Marketing Fund is intended to maximize recognition of the Marks and patronage of Buona Businesses. Although we will endeavor to use the Marketing Fund to develop advertising, marketing and promotional materials, and to place advertising in a manner that will benefit all Buona Businesses, we have no obligation to ensure that expenditures by the Marketing Fund in or affecting any geographic area are proportionate or equivalent to contributions to the Marketing Fund by Buona Businesses operating in that geographic area or that any Buona Business will benefit directly or in proportion to its contribution to the Marketing Fund from the development of advertising, marketing and promotional materials or the placement of advertising. We assume no direct or indirect liability or obligation to Franchisee with respect to the maintenance, direction, or administration of the Marketing Fund. We may terminate or discontinue the Marketing Fund upon 30 days' notice to our franchisees. In that event, we will distribute all unspent monies to our franchisees in proportion to their respective contributions made in the previous 12 months. We have the right thereafter to reinstate the Marketing Fund upon 30 days' notice to our franchisees.

We currently do not have an advertising council composed of franchisees.

If a local advertising co-operative exists or is formed in your area or region consisting of Buona franchisee and/or affiliate-owned restaurants, you agreed to join and participate in the co-operative. The members of the cooperative are responsible for the maintenance, direction and administration of the co-operative. We assume no responsibility for the maintenance, direction or administration of the co-operative, including any failure of franchisees to make contributions to the co-operative. There are no franchisee advertising cooperatives currently in existence.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–46)