What is the Brand Fund used for at Chocolate Fish Coffee?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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Advertising
Our obligation. We will use the Brand 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 may be paid for by the Brand 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.
Advertising Fund. You and all other franchisees must contribute to our Brand Fund. Your contribution is 1% of gross sales per week.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 20–27)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the Brand Fund is used for marketing and related costs. The FDD specifies that media coverage is primarily local, and Chocolate Fish Coffee uses outside vendors and consultants to produce advertising.
Franchisees are required to contribute 1% of their gross sales per week to the Brand Fund. However, Chocolate Fish Coffee retains the right to have other franchisees contribute a different amount or at a different rate, and outlets that Chocolate Fish Coffee owns are not obligated to contribute to the Brand Fund.
The Brand Fund is administered by Chocolate Fish Coffee, and the fund is not audited. Chocolate Fish Coffee will make unaudited annual financial statements available to franchisees upon request. The FDD notes that because Chocolate Fish Coffee is a new franchisor, it did not spend any money from the Brand Fund in its most recently concluded fiscal year. Any unspent funds will remain in the Brand Fund to be spent in the next year, and no money from the Brand Fund is spent principally to solicit new franchise sales.