What is the role of Chocolate Bash in administering the Marketing Fund?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
for our system.
- F. Marketing Fund. We will administer the Marketing Fund. (Section 5.5)
- G. Website. We will maintain a website for the Chocolate Bash brand, which will include your business information and telephone number. (Section 5.5)
Advertising
Our obligation. We will use the Marketing Fund only for marketing and related purposes and costs. Media coverage is primarily local. We use outside vendors and consultants to produce advertising. We are not required to spend any amount of advertising in the area or territory where any particular franchisee is located. We will maintain the brand website (which will be paid for by the Marketing Fund). We have no other obligation to conduct advertising.
Your own advertising material. You may use your own advertising or marketing material only with our approval. To obtain our approval, you must submit any proposed advertising or marketing material at least 14 days prior to use. If we do not respond, the material is deemed rejected. If you develop any advertising or marketing materials, we may use those materials for any purpose, without any payment to you.
Advertising council. We do not have an advertising council composed of franchisees. The franchise agreement does not give us the power to form an advertising council.
Local or Regional Advertising Cooperatives. We do not currently have any local or regional advertising cooperatives.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 19–25)
What This Means (2024 FDD)
According to the 2024 Chocolate Bash Franchise Disclosure Document, Chocolate Bash administers the Marketing Fund. Franchisees are required to contribute 1% of their gross sales per week to the Marketing Fund. However, Chocolate Bash retains the right to have different franchisees contribute different amounts or at different rates. Chocolate Bash-owned outlets are not obligated to contribute to the Marketing Fund. The funds are used only for marketing and related costs, with media coverage being primarily local.
Chocolate Bash uses outside vendors and consultants to produce advertising. The FDD specifies that Chocolate Bash is not required to spend any amount of advertising in the area or territory where any particular franchisee is located. Chocolate Bash will maintain the brand website, with costs paid for by the Marketing Fund.
The Marketing Fund is not audited, but Chocolate Bash will make unaudited annual financial statements available to franchisees upon request. In 2023, Chocolate Bash spent all the funds collected for the Marketing Fund. No money from the Marketing Fund is spent principally to solicit new franchise sales.
Prospective franchisees should note that Chocolate Bash has broad discretion over how the Marketing Fund is spent, and there is no guarantee that funds will be used to directly benefit any specific franchise location. The lack of an independent audit also means franchisees must rely on Chocolate Bash's own accounting of the fund's income and expenses.