Does Cd One Price Cleaners segregate the Marketing Fund from its other funds?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
mats and sample materials at cost, plus any related shipping, handling and storage charges.
We will account for the Marketing Fund separately, but we need not segregate its funds from our other funds. Except as described above, we will not use the Marketing Fund to defray any of our general operating expenses. The Marketing Fund is not our asset nor a trust, and we do not have a fiduciary duty to you for maintaining, directing or administering the Marketing Fund or for any other reason. We may spend in a fiscal year an amount greater or less than the aggregate contributions of all CD stores to the Marketing Fund in that year. The Marketing Fund may borrow from us or other lenders at standard commercial interest rates to cover deficits or invest any surplus for future use. The Marketing Fund will use all interest earned on contributions to pay costs before spending other assets. The Marketing Fund currently is not audited but we will provide an annual, unaudited statement of amounts collected and costs incurred for our immediately preceding fiscal year. During our 2024 fiscal year, the Marketing Fund spent 40% of its expenditures on media placement (primarily radio, direct mail, billboard advertising, community development programs and sponsorships, various in-store promotions, free-standing inserts and other local and digital media), 38% on administrative expenses (including salaries, taxes, benefits and expenses for
personnel responsible for directing, managing and executing Marketing Fund programs and activities), and 22% on other expenses (including creative/concept development, in-store marketing, customer survey/referral programs, web site updates and research). We may cause the Marketing Fund to be incorporated or operated through an entity separate from us at any time, and the successor entity will have all of our rights and duties described in this Item 11.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 33–47)
What This Means (2025 FDD)
According to Cd One Price Cleaners' 2025 Franchise Disclosure Document, the Marketing Fund is accounted for separately, but the funds are not required to be segregated from Cd One Price Cleaners' other funds. While the funds don't have to be kept separate, Cd One Price Cleaners states that the Marketing Fund will not be used to defray any of their general operating expenses, except as described in Item 11.
Cd One Price Cleaners details that the Marketing Fund is not considered an asset or a trust, and they do not have a fiduciary duty to franchisees regarding the fund's maintenance, direction, or administration. Cd One Price Cleaners may spend more or less than the aggregate contributions of all Cd One Price Cleaners stores in a given fiscal year. The Marketing Fund is allowed to borrow funds from Cd One Price Cleaners or other lenders at standard commercial interest rates to cover deficits or invest any surplus for future use. Any interest earned on contributions will be used to pay costs before spending other assets.
The Marketing Fund is not currently audited; however, Cd One Price Cleaners will provide an annual, unaudited statement of amounts collected and costs incurred for the immediately preceding fiscal year. During the 2024 fiscal year, the Marketing Fund allocated its expenditures as follows: 40% on media placement, 38% on administrative expenses, and 22% on other expenses. Cd One Price Cleaners retains the right to incorporate the Marketing Fund or operate it through a separate entity, which would assume all rights and duties described in Item 11.