Can Carbones Pizzeria use the Advertising Fund to purchase market research?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
- d. Franchisor may use monies in the Carbone's Pizza Advertising Fund for any purpose that promotes the Carbone System, and its Names and Marks, 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 Franchisor's 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.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the franchisor has the ability to use the Advertising Fund for market research. Franchisees contribute to this fund by paying an Advertising Fee of one percent (1%) of monthly Gross Sales, although this fee is not applied to Gross Sales exceeding $2,000,000 in any calendar year.
Carbones Pizzeria explicitly states that the Advertising Fund can be used for various purposes that promote the Carbone System. These include the creation and placement of advertising, the purchase of marketing-related technology platforms like social media management tools, and importantly, consumer and market research, including surveys and sampling. The franchisor also has the discretion to use the fund for other advertising and marketing activities.
This means that a portion of the advertising fees paid by Carbones Pizzeria franchisees may be allocated to market research initiatives conducted by the franchisor. These research efforts can help the franchisor understand consumer preferences, market trends, and the effectiveness of different advertising strategies, ultimately benefiting the entire franchise system. Franchisees should be aware that while they contribute to the fund, the franchisor has broad discretion over how the funds are spent, including the decision to invest in market research.