Is the Canine Dimensions Internet Advertising Fund considered an asset of the Franchisor?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor will not use the Internet Advertising Fund for any of Franchisor's general operating expenses, except to compensate the reasonable salaries, administrative costs, travel expenses and overhead Franchisor incurs in administering the Internet Advertising Fund and its programs, including, without limitation, public relations, conducting market research, preparing advertising, promotion and marketing materials, and collecting and accounting for the Internet Advertising Fund contributions. The Internet Advertising Fund will not be Franchisor's asset. The Internet Advertising Fund is not a trust, and Franchisor does not owe Franchisee fiduciary obligations because of Franchisor's maintaining, directing or administering the Internet Advertising Fund or any other reason. The Internet Advertising Fund may spend in any fiscal year more or less than the total Internet Advertising Fund contributions in that year, borrow from Franchisor or others to cover deficits, or invest any surplus for future use. Any funds remaining in the Internet Advertising Fund at the end of any year will carry over to the next year. Franchisor will use all interest earned on Internet Advertising Fund contributions to pay costs before using the Internet Advertising Fund's other assets. Franchisor will prepare an annual, unaudited statement of Internet Advertising Fund collections and expenses and give Franchisee the statement upon written request. Franchisor may incorporate the Internet Advertising Fund or operate it through a separate entity whenever Franchisor deems appropriate.
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, the Internet Advertising Fund is explicitly stated not to be an asset of the Franchisor. The document clarifies that Canine Dimensions directs all programs financed by the Internet Advertising Fund, maintaining sole control over creative concepts, materials, endorsements, and media placement.
Specifically, the Internet Advertising Fund can be used for various advertising and marketing activities, including preparing advertisements, administering internet programs, and supporting public relations and market research. While Canine Dimensions can use the fund to cover reasonable salaries, administrative costs, travel expenses, and overhead incurred in administering the fund, it cannot use the fund for its general operating expenses.
Furthermore, the FDD states that the Internet Advertising Fund is not a trust, and Canine Dimensions does not owe franchisees fiduciary obligations related to the fund's maintenance, direction, or administration. The fund may spend more or less than the total contributions in a given year, borrow funds, or invest any surplus for future use, with any remaining funds carrying over to the next year. Interest earned on contributions will be used to pay costs before using other assets of the fund. Canine Dimensions will provide an annual, unaudited statement of the fund's collections and expenses to franchisees upon written request and may choose to incorporate the fund or operate it through a separate entity.