What was the advertising expense for Chem Dry for the year ended December 31, 2023?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
e amount of any sales tax imposed by any federal, state, municipal or other governmental authority directly on sales and collected from customers, provided that the amount thereof is added to the selling price or absorbed therein and actually paid by FRANCHISEE to such governmental authority.
B. BRAND MARKETING FUND
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- Recognizing the value of advertising and marketing to the development of goodwill and the public image of Chem-Dry Businesses, CDI has established a Brand Marketing Fund (the "BMF") for the advertising, marketing and public relations programs and materials CDI deems appropriate to promote the Chem-Dry brand. FRANCHISEE agrees to contribute a continuing, non-refundable, monthly amount between $100 and $300 as determined by CDI (the "BMF Contribution"). The BMF Contribution shall be payable on the 25th day of each month beginning the same month your first Monthly Franchise Fee payment is due. Chem-Dry Businesses operated by CDI or its affiliates shall contribute to the BMF on the same basis as Chem-Dry Business franchisees. The BMF Contribution can be increased to a maximum of $300 upon 30 days prior written notice from CDI to all FRANCHISEES. The separate BMF account is not a trust fund and CDI is not a fiduciary with regard to the separate BMF account or the monies on deposit therein.
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- We may deposit marketing, promotional and other payments we receive from suppliers or you into the BMF. CDI, not an advertising council, will administer the BMF and will disburse the BMF to pay for marketing, advertising, promotional, public relations, and other similar activities solely intended to benefit the System and all franchised and any company-owned locations. Those activities may include (without limitation) (a) market research, (b)
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
Based on the 2024 Chem-Dry Franchise Disclosure Document, specific advertising expenses for the year ending December 31, 2023, are not explicitly detailed. However, the FDD does mention the Brand Marketing Fund (BMF), which Chem-Dry uses for advertising, marketing, and public relations efforts to promote the Chem-Dry brand. Franchisees are required to contribute to this fund, with monthly contributions ranging from $100 to $300, as determined by Chem-Dry.
The BMF is administered by CDI, and the funds are disbursed to cover various marketing activities, including market research, marketing technology, customer loyalty programs, media purchases, advertising production, and agency fees. Chem-Dry may also use the BMF to cover administrative overhead related to these marketing activities. While the FDD states that an unaudited financial statement and a summary of expenditures (the "Annual Report") will be prepared annually by CDI, the specific amount spent on advertising for the year ended December 31, 2023 is not provided in this excerpt.
Prospective franchisees should note that the BMF is not a trust fund, and Chem-Dry is not a fiduciary regarding the fund. While Chem-Dry directs the activities and programs funded by the BMF with the assistance of a Chem-Dry Brand Marketing Fund Committee, franchisees are not guaranteed a specific benefit equivalent to their contribution.
To obtain the specific advertising expenses for the year ended December 31, 2023, a prospective franchisee should request the Annual Report from Chem-Dry, as mentioned in the FDD. This report would provide a summary of expenditures from the BMF, offering more clarity on how the funds are allocated and spent on advertising and marketing activities. Understanding these expenses can help a franchisee assess the value and effectiveness of the marketing support provided by Chem-Dry.