factual

Can Chocolate Fish Coffee require franchisees to participate in advertising or promotional campaigns?

Chocolate_Fish_Coffee Franchise · 2024 FDD

Answer from 2024 FDD Document

e, and sponsorships) that have not been approved by Chocolate Fish Franchising. Chocolate Fish Franchising may (but is not obligated to) operate all "social media" accounts on behalf of the System, or it may permit franchisees to operate one or more

accounts. Franchisee must comply with any System Standards regarding marketing, advertising, and public relations, include any social media policy that Chocolate Fish Franchising may prescribe. Franchisee shall implement any marketing plans or campaigns determined by Chocolate Fish Franchising.

  • 9.2 Use by Chocolate Fish Franchising. Chocolate Fish Franchising may use any marketing materials or campaigns developed by or on behalf of Franchisee, and Franchisee hereby grants an unlimited, perpetual, royalty-free license to Chocolate Fish Franchising for such purpose.
  • 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.
  • (d) Contribution by Other Outlets.

Source: Item 23 — RECEIPTS (FDD pages 41–119)

What This Means (2024 FDD)

According to the 2024 Chocolate Fish Coffee Franchise Disclosure Document, franchisees must adhere to marketing and advertising standards set by Chocolate Fish Coffee. Specifically, franchisees are required to implement any marketing plans or campaigns that Chocolate Fish Franchising determines. This means that Chocolate Fish Coffee has the authority to direct the marketing efforts of its franchisees.

Chocolate Fish Coffee may also establish a Brand Fund to promote the system at various levels (local, regional, national, or international). If a Brand Fund is established, Chocolate Fish Coffee will hold contributions from all franchisees in a separate bank account. The funds are to be used for marketing, advertising, and public relations activities, including the development and placement of ads, sponsorships, contests, website maintenance, social media, and market research.

It's important to note that Chocolate Fish Coffee has discretion over how the Brand Fund is spent, and expenditures do not need to be proportionate to a franchisee's contributions or provide any direct benefit to the franchisee. Additionally, Chocolate Fish Coffee may use marketing materials developed by franchisees and has an unlimited license to do so. Franchisees are also required to sell gift cards, participate in loyalty programs, and engage in customer incentive programs as designated by Chocolate Fish Coffee.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.