What is the franchisee's contribution to the Chocolate Bash Marketing Fund?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
Advertising Fund. You and all other franchisees must contribute to our Marketing Fund. Your contribution is 1% of gross sales per week. We reserve the right to have other franchisees contribute a different amount or at a different rate. Outlets that we own are not obligated to contribute to the Marketing Fund. We administer the fund. The fund is not audited. We will make unaudited annual financial statements available to you upon request.
If less than all marketing funds are spent in the fiscal year in which they accrue, the money will remain in the Marketing Fund to be spent in the next year. In 2023 we spend all the funds collected for the Marketing Fund.
No money from the Marketing Fund is spent principally to solicit new franchise sales.
Market introduction plan. You must develop a market introduction plan and obtain our approval of the plan at least 30 days before the projected opening date of your business.
Required spending. After you open, you must spend at least 4% of gross sales each month on marketing your business.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 19–25)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, franchisees are required to contribute to the Marketing Fund. This contribution is set at 1% of gross sales per week. However, Chocolate Bash retains the right to adjust this contribution amount or rate differently for other franchisees, meaning there is a possibility of inconsistent contribution percentages among franchisees. Company-owned outlets are exempt from contributing to the Marketing Fund.
The Marketing Fund is administered by Chocolate Bash, and it is not subject to an independent audit. While unaudited annual financial statements are available to franchisees upon request, the lack of an audit may raise concerns about transparency and accountability in fund management. In 2023, all funds collected for the Marketing Fund were spent within the fiscal year.
In addition to the Marketing Fund contribution, franchisees are also required to spend a minimum of 4% of gross sales each month on local marketing efforts for their specific business. This mandatory spending ensures that franchisees actively promote their individual locations in addition to the broader marketing initiatives funded by the Marketing Fund. Prospective franchisees should consider both the Marketing Fund contribution and the required local marketing spend when evaluating the financial obligations associated with a Chocolate Bash franchise.