What is the Canine Dimensions Franchisor's intention for the Internet Advertising Fund?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
incorporate the Internet Advertising Fund or operate it through a separate entity whenever Franchisor deems appropriate.
Franchisor intends the Internet Advertising Fund to maximize recognition of the Marks and patronage of Canine Dimensions Businesses. Although Franchisor will try to use the Internet Advertising Fund to develop advertising and marketing materials and programs, and to place advertising and marketing, that will benefit all Canine Dimensions Businesses, Franchisor need not ensure that Internet Advertising Fund expenditures in or affecting any geographic area are proportionate or equivalent to the Internet Advertising Fund contributions by Businesses operating in that geographic area or that any Business benefits directly or in proportion to its Internet Advertising Fund contribution from the development or placement of advertising and marketing materials. Franchisor has the right, but no obligation, to use collection agents and institute legal proceedings to collect Internet Advertising Fund contributions at the Internet Advertising Fund's expense. Franchisor also may forgive, waive, settle and compromise all claims by or against the Internet Advertising Fund. Except as expressly provided in this Section, Franchisor assumes no direct or indirect liability or obligation to Franchisee for collecting amounts due to, maintaining, directing or administering the Internet Advertising Fund.
Franchisor may at any time defer or reduce the Internet Advertising Fund contributions of a Canine Dimensions Business and may reduce or suspend Internet Advertising Fund contributions and operations for one or more periods of any length and terminate (and, if terminated, reinstate) the Internet Advertising Fund. If Franchisor terminates the Internet Advertising Fund, Franchisor will distribute all unspent monies to all Canine Dimensions Businesses (whether franchised or operated by Franchisor or its affiliates) who contributed to it during the preceding twelve (12) month period.
12. INSURANCE
12.1 Requirement
Franchisee must procure, no later than fifteen (15) days prior to the commencement of operations of the Franchised Business, and shall maintain in full force and effect at all times during the Term, at Franchisee's expense, an insurance policy or policies protecting Franchisee and Franchisor, and their respective officers, directors, shareholders, partners, and employees, against any demand or claim with respect to personal injury, death, or property damage, or any loss, liability, or expense whatsoever arising or occurring upon or in connection with the Franchised Business. The insurance policy(ies) must contain an endorsement to Franchisee's policy naming Franchisor and its officers, directors, shareholders, partners and employees shall be named as "additional named insureds" and not "additional insureds" in the broadest form, extending to Franchisor's negligence and errors and omissions, and cannot be limited to vicarious liability. The insurance afforded to additional insureds must apply as primary insurance and not contribute to any insurance or self-insurance available to Canine Dimensions Franchising, LLC.
12.2 Minimum Coverage
Such policy or policies shall be written by an insurance company satisfactory to Franchisor in accordance with standards and specifications set forth in the Manual or otherwise in writing, and shall include, at a minimum, such coverages and policy limits as may reasonably be specified by Franchisor from time to time, which coverages may include, without limitation, the following:
- 12.2.1 comprehensive general liability coverage against claims for bodily and personal injury, death, and property damage caused by or occurring in conjunction with the operation of the Franchised Business or Franchisee's conduct of business pursuant to this Agreement under one or more policies of insurance containing minimum liability coverage of One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) aggregate, which includes product / completed operations insurance and an endorsement specifically covering cyber liability risks;
- 12.2.2 automobile liability for any vehicles used in the operation of the Franchised Business with minimum liability coverage (split limit) of Two Hundred Fifty Thousand Dollars ($250,000) per person, Five Hundred Thousand Dollars ($500,000) per accident and One Hundred Thousand Dollars ($100,000) property damage;
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, the franchisor intends for the Internet Advertising Fund to maximize recognition of their Marks and increase patronage of Canine Dimensions businesses. While they aim to develop advertising and marketing materials and programs that benefit all Canine Dimensions businesses, they are not obligated to ensure that expenditures in any specific geographic area are proportionate to the contributions from businesses in that area. This means that franchisees in one location might contribute more to the fund than is spent on advertising in their locality.
The franchisor has the right to use collection agents and legal proceedings to collect contributions to the Internet Advertising Fund, and they can also forgive, waive, settle, and compromise claims related to the fund. The franchisor is not directly or indirectly liable to the franchisee for collecting, maintaining, directing, or administering the fund, except as expressly provided. This indicates that franchisees have limited recourse against the franchisor regarding the fund's management.
The franchisor can defer or reduce contributions, suspend or terminate the fund, and reinstate it if terminated. If the fund is terminated, any unspent monies will be distributed to all Canine Dimensions businesses that contributed to it during the preceding twelve-month period. The franchisor also has sole control over the creative concepts, materials, endorsements, media placement, and allocation of the programs financed by the fund. The fund may be used for preparing and producing advertisements, administering internet advertising programs, and supporting public relations, market research, and other advertising activities.
However, the Internet Advertising Fund cannot be used for the franchisor's general operating expenses, except for reasonable salaries, administrative costs, travel expenses, and overhead incurred in administering the fund. The fund is not considered an asset of the franchisor, nor is it a trust, and the franchisor does not owe franchisees fiduciary obligations related to the fund. The fund can spend more or less than the total contributions in a given year, borrow to cover deficits, or invest surpluses for future use. Any interest earned on contributions will be used to pay costs before using other assets of the fund. The franchisor will prepare an annual, unaudited statement of collections and expenses, which will be provided to franchisees upon written request. The franchisor may also incorporate the fund or operate it through a separate entity if deemed appropriate.