Can CB Franchising accumulate funds in the Chocolate Bash Marketing Fund?

According to Chocolate Bash's 2024 Franchise Disclosure Document, CB Franchising has the ability to accumulate funds within the Marketing Fund. Specifically, CB Franchising can carry over any remaining balance in the Marketing Fund to subsequent years. This means that if the Marketing Fund generates more revenue than expenses in a given year, the surplus can be saved and used in future years.

This provision offers both potential benefits and risks for Chocolate Bash franchisees. On the one hand, accumulating funds could allow for larger or more impactful marketing campaigns in the future. It could also provide a cushion in years where marketing expenses are higher than usual. On the other hand, franchisees might be concerned that accumulated funds are not being used effectively or that they are being held unnecessarily.

It's also worth noting that CB Franchising has the discretion to decide how the Marketing Fund is spent, and these expenditures do not need to be proportionate to a franchisee's contributions or provide any direct benefit to the franchisee. CB Franchising also has no fiduciary duty with regard to the Marketing Fund. Franchisees receive an unaudited annual financial statement of the Marketing Fund within 120 days of the close of CB Franchising's fiscal year, which they can request to review.