What activities and expenses can the Chocolate Bash Marketing Fund be used for?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
If CB Franchising has established a Marketing Fund:
- (a) Separate Account. CB Franchising shall hold the Marketing Fund Contributions from all franchisees in one or more bank accounts separate from CB Franchising's other accounts.
- (b) Use. CB Franchising shall use the Marketing Fund only for marketing, advertising, and public relations materials, programs and campaigns (including at local, regional, national, and/or international level), and related overhead. The foregoing includes such activities and expenses as CB Franchising reasonably determines, and may include, without limitation: development and placement of advertising and promotions; sponsorships; contests and sweepstakes; development of décor, trade dress, Marks, and/or branding; development and maintenance of brand websites; social media; internet activities; e-commerce programs; search engine optimization; market research; public relations, media or agency costs; trade shows and other events; printing and mailing; and administrative and overhead expenses related to the Marketing Fund (including the compensation of CB Franchising's employees working on marketing and for accounting, bookkeeping, reporting, legal and other expenses related to the Marketing Fund).
- (c) Discretion. Franchisee agrees that expenditures from the Marketing Fund need not be proportionate to contributions made by Franchisee or provide any direct or indirect benefit to Franchisee. The Marketing Fund will be spent at CB Franchising's sole discretion, and CB Franchising has no fiduciary duty with regard to the Marketing Fund.
- (d) Contribution by Other Outlets.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the Marketing Fund is used for marketing, advertising, and public relations on various levels. This includes creating materials, programs, and campaigns at the local, regional, national, and international levels.
The activities and expenses covered by the Marketing Fund, as determined reasonably by Chocolate Bash, include developing and placing advertisements and promotions, sponsorships, contests and sweepstakes, and creating décor, trade dress, Marks, and branding. It also covers developing and maintaining brand websites, social media, internet activities, e-commerce programs, search engine optimization, market research, public relations, media or agency costs, trade shows and other events, printing and mailing, and administrative and overhead expenses related to the Marketing Fund. These expenses can also include compensation for Chocolate Bash's employees working on marketing, as well as accounting, bookkeeping, reporting, legal, and other expenses related to the Marketing Fund.
Prospective Chocolate Bash franchisees should note that the expenditures from the Marketing Fund do not need to be proportionate to their contributions, nor do they need to provide any direct or indirect benefit to the franchisee. The funds will be spent at Chocolate Bash's sole discretion, and Chocolate Bash has no fiduciary duty regarding the Marketing Fund. This means that while franchisees contribute to the fund, they have limited control over how the money is spent and no guarantee of a direct return on their investment. Franchisees can request an unaudited annual financial statement of the Marketing Fund within 120 days of the close of Chocolate Bash's fiscal year.