Is Capriottis Sandwich Shop required to provide advertising assistance to franchisees?
Capriottis_Sandwich_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
- (iii) Franchisor shall make contributions to the Marketing Fund for each CAPRIOTTI'S Restaurant that Franchisor or its affiliate owns.
- (iv) While Franchisee is in compliance with Section 8.23, Franchisee will be furnished with advertising materials which were produced with expenditures from the Marketing Fund for distribution to franchisees of the System on the same terms and conditions as the materials are furnished to other franchisees. However, Franchisee's failure to pay required Marketing Fund contributions will result in Franchisee's not having the right to receive such materials while it is in default (although Franchisor's decision not to furnish such materials after any payment default will not excuse Franchisee's obligation to pay in full all outstanding amounts). In addition, Franchisor has the right to require Franchisee periodically to pay Franchisor or the Marketing Fund for additional promotional or point-of-purchase materials that Franchisee must use in connection with the Franchised Restaurant but which are not being provided by the Marketing Fund in consideration for Franchisee's contributions. Franchisee must pay for these materials on or before the date and by the means Franchisor specifies.
- (v) Franchisee shall make its contribution to the Marketing Fund at the same time it is required to pay Franchisor the Royalty Fee and in the manner designated by Franchisor, including bank drafting. Contributions to the Marketing Fund may be used to defray expenses of Franchisor only to the extent of the administrative costs and overhead that Franchisor may reasonably incur in administering the Marketing Fund.
- (vi) The Marketing Fund, all contributions to it and any earnings on those contributions shall be used exclusively to meet all costs of maintaining, administering or directing and preparing promotional and/or advertising activities. Franchisor has the sole discretion over how and where the Marketing Fund contributions are spent to promote, enhance or further the growth of the System,
Source: Item 22 — CONTRACTS (FDD page 73)
What This Means (2025 FDD)
According to the 2025 Capriottis Sandwich Shop Franchise Disclosure Document, Capriottis Sandwich Shop contributes to the Marketing Fund for each of its own restaurants. Franchisees in compliance with Section 8.23 of the franchise agreement will receive advertising materials produced using Marketing Fund expenditures. These materials are distributed to franchisees under the same terms and conditions as they are furnished to other franchisees.
However, a franchisee's failure to make required Marketing Fund contributions means they will not have the right to receive these advertising materials while in default. This does not excuse the franchisee's obligation to pay all outstanding amounts in full. Capriottis Sandwich Shop also has the right to require franchisees to pay for additional promotional or point-of-purchase materials that the franchisee must use, but which are not provided by the Marketing Fund in consideration for the franchisee's contributions. Franchisees must pay for these materials by the date and means specified by Capriottis Sandwich Shop.
The Marketing Fund contributions are made at the same time the franchisee pays the Royalty Fee and in the manner designated by Capriottis Sandwich Shop, including bank drafting. The Marketing Fund, contributions to it, and any earnings on those contributions are used exclusively to meet the costs of maintaining, administering, directing, and preparing promotional and/or advertising activities. Capriottis Sandwich Shop has sole discretion over how and where the Marketing Fund contributions are spent to promote, enhance, or further the growth of the Capriottis Sandwich Shop system.