Does Canine Dimensions have a fiduciary duty to franchisees regarding the Internet Advertising Fund?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
We have no fiduciary duty to you or other direct or indirect liability or obligation to collect amounts due to the Internet Advertising Fund or to maintain, direct or administer the Internet Advertising Fund. Any unused funds that were collected in any calendar year will be applied to the following year's funds, and we reserve the right to contribute or loan additional funds to the Internet Advertising Fund on any terms we deem reasonable. If the Internet Advertising Fund is terminated, we will return any unused funds in the Internet Advertising Fund to the franchisees who contributed to it during the preceding twelve (12) month period.
In our fiscal year 2024, we collected $499,450 for the Internet Advertising Fund. 96% was used for placement of Internet advertising and 4% was used for administrative expenses.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 19–23)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, Canine Dimensions does not have a fiduciary duty to franchisees regarding the Internet Advertising Fund. The FDD explicitly states that Canine Dimensions has no fiduciary duty to franchisees concerning the collection, maintenance, direction, or administration of the Internet Advertising Fund.
This means that Canine Dimensions is not legally obligated to act in the best interest of its franchisees when managing the fund. Canine Dimensions has complete discretion on how the Internet Advertising Fund will be utilized and may use the fund for local, regional, or national Internet marketing, advertising, sales promotion and promotional materials, public and consumer relations, website development and search engine optimization, the development of technology for the System and any other purpose to promote the Marks. Canine Dimensions may reimburse themselves or their affiliates from the fund for administrative costs, audits, accounting, legal expenses, and other direct or indirect expenses.
While Canine Dimensions does not have a fiduciary duty, they do provide an annual accounting of the Internet Advertising Fund if a franchisee submits a written request at least 120 days after the end of the fiscal year. For the fiscal year 2024, Canine Dimensions collected $499,450 for the Internet Advertising Fund, with 96% used for internet advertising and 4% for administrative expenses. Any unused funds are applied to the following year's funds, and if the fund is terminated, unused funds will be returned to the franchisees who contributed during the preceding twelve-month period.