What costs and expenses can the C3 Wellness Spa Brand Development Fund be used to pay?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
with the Licensed Marks and general public brand recognition and awareness of the Licensed Marks. The Brand Development Fund will not be utilized to directly or indirectly market or promote the Franchised Business or, unless otherwise directed by Franchisor, in Franchisor's Reasonable Business Judgment, pay for media placements that may benefit or include any media market that includes Franchisee's Spa Location or Designated Territory;
- (5) Franchisee agrees that the Brand Development Fund may be used to pay various costs and expenses of Franchisor for such reasonable salaries, wages, administrative costs and overhead as Franchisor may incur in activities reasonably related to the administration, activities and/or the brand awareness goals of the Brand Development Fund including expenses incurred by Franchisor for advertising, marketing, product and service testing, product and service development, maintenance, evaluation and monitoring of the Business Management Systems, upgrades to the System Website, development of Digital Media and creative development that is internally administered or prepared by Franchisor and other marketing activities made by Franchisor, provided, however, that salary expenses for Franchisor's personnel paid by the Brand Development
Fund shall be commensurate with the amount of that time spent by such personnel on Brand Development Fund matters. Franchisor shall not use contributions to the Brand Development Fund to defray any of Franchisor's general operating expenses, except for such reasonable salaries, administrative costs and overhead as Franchisor may incur in activities reasonably related to the administration and activities of the Brand Development Fund and creation or conduct of its marketing programs including, without limitation, conducting market research, preparing advertising and marketing materials and collecting and accounting for contributions to the Brand Development Fund. Franchisor may spend in a fiscal year an amount greater or less than the aggregate contributions of all Spa Location Franchises to the Brand Development Fund in that year;
- (6) Franchisee agrees to participate in all advertising, marketing, promotions, research and public relations programs instituted by the Brand Development Fund;
- (7) Spa Location Franchises owned by Franchisor or Franchisor's affiliates are not required to pay any Brand Development Fund Fee or contribute to or make any contribution to the Brand Development Fund;
- (8) Franchisee and Franchisor acknowledge and agree that (a) the Brand Development Fund is not a trust, (b) Franchisor is not a trustee or fiduciary of the Brand Development Fund, and (c) Franchisor may deposit and maintain any and all funds of the Brand Development Fund Fee in Franchisor's general accounts. Brand Development Fund Fees are not required to be segregated from other assets or accounts of Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to the 2024 C3 Wellness Spa Franchise Disclosure Document, the Brand Development Fund can be used for various costs and expenses related to the administration and brand awareness goals of the fund. These include reasonable salaries, wages, administrative costs, and overhead incurred by C3 Wellness Spa for activities related to the fund. Specifically, the fund can cover expenses for advertising, marketing, product and service testing, product and service development, maintenance, evaluation and monitoring of Business Management Systems, upgrades to the System Website, development of Digital Media, and creative development that is internally administered or prepared by C3 Wellness Spa.
The salary expenses for C3 Wellness Spa personnel paid by the Brand Development Fund must be commensurate with the time spent on Brand Development Fund matters. The fund will not be used to cover C3 Wellness Spa's general operating expenses, except for reasonable salaries, administrative costs, and overhead related to the administration and activities of the Brand Development Fund and the creation or conduct of its marketing programs. These programs include conducting market research, preparing advertising and marketing materials, and collecting and accounting for contributions to the Brand Development Fund.
C3 Wellness Spa retains the flexibility to spend more or less in a fiscal year than the aggregate contributions from all Spa Location Franchises. All interest earned on the Brand Development Fund will be used to pay fund costs before other assets are expended. Franchisees can request a summary statement of monies collected and costs incurred by the Brand Development Fund for the immediately preceding fiscal year. C3 Wellness Spa may also establish a council to provide guidance on the administration of the Brand Development Fund and marketing matters, with the council serving in an advisory capacity.