Does Carbones Pizzeria guarantee that advertising expenditures will directly benefit each franchisee?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
The purpose of the fund is to develop marketing and advertising programs that benefit the Carbone's Pizza brand. This means we may use monies in the fund for any purpose that promotes the franchise system, and our trademarks, including the creation, production and placement of consumer advertising; purchase of marketing related technology platforms, such as social media management, market research, consumer insights and analytics; costs of preparing and conducting local, regional or national media of our choice, including: television, radio, internet, magazine, direct mail and newspaper, billboard, social media and digital advertising, direct mail campaigns, and other public relations activities; developing and/or hosting an internet web page or similar activities; administering advertising programs, direct mail and other media advertising; in-house staff assistance and related administrative costs; local and regional promotions; public relations campaigns including the cost of retaining public relations firms; consumer and market research (including surveys and sampling); and other advertising and marketing activities.
We currently use a design firm that produces our advertising materials. However, we may change this firm at any time. Advertising may be placed in local or regional traditional media. We also advertise on billboards and buses. We may also advertise over the Internet including social media channels. We do not guarantee that advertising expenditures from the Fund will benefit you or any other franchisee directly, on a pro rata basis, or at all. We have no obligation to spend any amount on advertising in your territory. Advertising monies we collect that are not used in one year will be carried over to the next year. Any interest the funds earn will be used for advertising before we use any principal. We may also allocate a portion of the funds to cover the costs of any of our employees who provide services to the fund. We will not spend any portion of any advertising fund for advertising principally designed to solicit the sale of franchises. Although we do not audit the fund, at your request, we will make available to you an annual accounting that shows how the fund proceeds were spent for the previous year.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 15–19)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, Carbones Pizzeria does not guarantee that advertising expenditures from the advertising fund will directly benefit franchisees. The FDD specifies that Carbones Pizzeria has no obligation to spend any amount on advertising in a franchisee's territory.
The purpose of the advertising fund is to promote the Carbones Pizzeria brand, and the franchisor has the discretion to use the funds for various marketing and advertising programs. These programs include creating and placing consumer advertising across different media, purchasing marketing-related technology platforms, conducting market research, and other advertising and marketing activities.
Carbones Pizzeria collects an advertising fee of 1% of monthly Gross Sales up to $2,000,000 from franchisees, with the funds maintained in a separate bank account. While the FDD states that Carbones Pizzeria solicits input from franchisees regarding advertising methods and expenditures, the ultimate decisions on how the advertising funds are spent rest with the franchisor. Franchisees are invited to participate, and decisions are made based upon consensus of franchisees. At a franchisee's request, Carbones Pizzeria will provide an annual accounting that shows how the fund proceeds were spent for the previous year, although the fund is not audited.