Can the Chocolate Fish Coffee Brand Fund be used for local marketing?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
- 9.3 Brand Fund. Chocolate Fish Franchising may establish a Brand Fund to promote the System on a local, regional, national, and/or international level.
If Chocolate Fish Franchising has established a Brand Fund:
- (a) Separate Account.
Chocolate Fish Franchising shall hold the Brand Fund Contributions from all franchisees in one or more bank accounts separate from Chocolate Fish Franchising's other accounts.
- (b) Use.
Chocolate Fish Franchising shall use the Brand 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 Chocolate Fish 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 Brand Fund (including the compensation of Chocolate Fish Franchising's employees working on marketing and for accounting, bookkeeping, reporting, legal and other expenses related to the Brand Fund).
- (c) Discretion.
Franchisee agrees that expenditures from the Brand Fund need not be proportionate to contributions made by Franchisee or provide any direct or indirect benefit to Franchisee.
The Brand Fund will be spent at Chocolate Fish Franchising's sole discretion, and Chocolate Fish Franchising has no fiduciary duty with regard to the Brand Fund.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to the 2024 Chocolate Fish Coffee Franchise Disclosure Document, Chocolate Fish Franchising may establish a Brand Fund to promote the System on a local, regional, national, and/or international level. The Brand Fund can be used for marketing, advertising, and public relations materials, programs, and campaigns at the local, regional, national, and/or international level, and related overhead.
These activities and expenses include the 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 Brand Fund (including the compensation of Chocolate Fish Franchising's employees working on marketing and for accounting, bookkeeping, reporting, legal and other expenses related to the Brand Fund).
However, the franchisee agrees that expenditures from the Brand Fund need not be proportionate to contributions made by the franchisee or provide any direct or indirect benefit to the franchisee. The Brand Fund will be spent at Chocolate Fish Franchising's sole discretion, and Chocolate Fish Franchising has no fiduciary duty with regard to the Brand Fund. This means that while the Brand Fund can be used for local marketing, Chocolate Fish Coffee has the final say on how the funds are spent, and there is no guarantee that a franchisee's contributions will directly benefit their specific location.