Does Carbones Pizzeria maintain and administer an advertising fund?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
imes we may specify (Franchise Agreement, Section 7).
- (4) Maintain and administer the Carbone's Pizza Advertising Fund (Franchise Agreement, Section 6).
- (5) Be available to consult with you on marketing initiatives you may want to employ (Franchise Agreement, Section 7).
Advertising.
We have no obligation to spend any amounts on advertising your Restaurant.
Carbone's Pizza Advertising Fund.
You must pay an advertising fee of 1% of your monthly Gross Sales up to $2,000,000. There is no advertising fee on Gross Sales over $2,000,000 in any given year. Funds are collected and maintained in a separate bank account from our general operating funds. Our company-owned Restaurant also pays the 1% advertising fee to the fund. There is one franchisee who does not pay an advertising fee and one whose threshold to cease payments is less than $2,000,000.
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.
Although we do not maintain an advertising council composed of franchisees we do solicit the
input of our franchisees related to advertising methods and expenditures. All franchisees are invited to participate, and decisions are made based upon consensus of franchisees. Franchisees are not required to participate in local or regional advertising cooperatives. During 2024 monies in the Fund were spent by us for the following purposes:
| Item | Percentage of Total |
|---|---|
| Expenditures | |
| Email and on-line advertising | 41.96% |
| Advertising Creative and Production services | 28.26% |
| Sports advertising | 26.58% |
| Print advertising | 3.20% |
Local Advertising.
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 maintain and administer an advertising fund. Franchisees are required to pay an advertising fee of 1% of monthly Gross Sales, but this is capped for those with high revenues. Specifically, the 1% fee applies only to the first $2,000,000 in Gross Sales annually, meaning sales above that threshold are not subject to the advertising fee. The advertising fees are kept in a separate bank account from Carbones Pizzeria's general operating funds, and the company-owned restaurant also contributes 1% of its gross sales to the fund. However, there are exceptions, as one franchisee does not pay an advertising fee, and another has a lower threshold than $2,000,000.
The purpose of the Carbone's Pizza Advertising Fund is to develop marketing and advertising programs that benefit the Carbones Pizzeria brand. The funds may be used for various purposes, including creating and placing consumer advertising, purchasing marketing-related technology platforms, conducting market research, and covering the costs of local, regional, or national media campaigns. These campaigns may include television, radio, internet, magazine, direct mail, newspaper, billboard, social media, and digital advertising, as well as public relations activities. Carbones Pizzeria may also use the funds to develop and host websites, administer advertising programs, cover in-house staff and administrative costs, support local and regional promotions, and conduct consumer and market research.
Carbones Pizzeria uses a design firm to produce advertising materials but may change this firm at any time. Advertising may be placed in local or regional traditional media, billboards, buses, and the internet, including social media channels. Carbones Pizzeria does not guarantee that advertising expenditures from the fund will directly benefit any franchisee on a pro-rata basis or at all and has no obligation to spend any amount on advertising in a franchisee's specific territory. Advertising monies collected but not used in a given year will be carried over to the next year, and any interest earned on the funds will be used for advertising before any principal. A portion of the funds may also be allocated to cover the costs of employees who provide services to the fund. No advertising funds will be used to solicit the sale of franchises.
While Carbones Pizzeria does not have a formal advertising council composed of franchisees, it does solicit input from franchisees regarding advertising methods and expenditures. All franchisees are invited to participate, and decisions are made based on the consensus of franchisees. Franchisees are not required to participate in local or regional advertising cooperatives. At a franchisee's request, Carbones Pizzeria will provide an annual accounting that shows how the fund proceeds were spent in the previous year, although the fund is not formally audited. In 2024, the fund's monies were spent on email and online advertising (41.96%), advertising creative and production services (28.26%), sports advertising (26.58%), and print advertising (3.20%).