Does Chocolate Fish Coffee have any obligation to conduct advertising other than maintaining the brand website?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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. 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 Brand Fund. We administer the fund. The fund is not audited. We will make unaudited annual financial statements available to you upon request.
Because we are a new franchisor, we did not spend any money from the Brand Fund in our most recently concluded fiscal year.
If less than all Brand Funds are spent in the fiscal year in which they accrue, the money will remain in the Brand Fund to be spent in the next year.
No money from the Brand 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.
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 company's only obligation regarding advertising is to maintain the brand website. The FDD specifies that Chocolate Fish Coffee is not required to spend any amount on advertising in the area or territory where any particular franchisee is located. However, Chocolate Fish Coffee will use the Brand Fund for marketing and related purposes and costs. Media coverage is primarily local, and Chocolate Fish Coffee uses outside vendors and consultants to produce advertising.
As a Chocolate Fish Coffee franchisee, you are permitted to use your own advertising or marketing material, but it requires prior approval from Chocolate Fish Coffee. You must submit any proposed advertising or marketing material at least 14 days before its intended use. If Chocolate Fish Coffee does not respond within that timeframe, the material is considered rejected. It is important to note that if you develop any advertising or marketing materials, Chocolate Fish Coffee may use those materials for any purpose without providing any payment to you.
Chocolate Fish Coffee does not have an advertising council composed of franchisees, nor does the franchise agreement grant them the power to form one. Additionally, there are currently no local or regional advertising cooperatives in place. Franchisees are required to contribute to the Brand Fund, with a contribution of 1% of gross sales per week. Chocolate Fish Coffee retains the right to have other franchisees contribute a different amount or at a different rate, while outlets that Chocolate Fish Coffee owns are not obligated to contribute to the Brand Fund. Franchisees must also develop a market introduction plan and obtain Chocolate Fish Coffee's approval at least 30 days before the projected opening date of their business.