What is the 'Advertising Fund' for a Christies International Real Estate franchise?
Christies_International_Real_Estate Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.1. Advertising Fund. We reserve the right to require that you to pay a monthly advertising fee ("Advertising Fund Fee") for deposit into a system marketing fund (the "Advertising Fund").
As of the Effective Date, we have not established an Advertising Fund, and we do not collect the Advertising Fund Fee.
We may implement, begin collecting, and increase the Advertising Fund Fee at any time upon written notice to you; however, the Advertising Fund Fee will not exceed three percent (3%) of Gross Revenue.
If we begin collecting the Advertising Fund Fee, you will pay the Advertising Fund Fee in the same manner and at the same time as the Royalty Fee.
If we begin collecting the Advertising Fund Fee, we will place all Advertising Fund Fees we receive in the Advertising Fund and we will manage such Advertising Fund.
Any CHRISTIE'S INTERNATIONAL REAL ESTATE businesses operated by us or our affiliates will not be required to contribute to the Advertising Fund.
The Advertising Fund will pay expenses in connection with the general promotion of the Marks and the System, which may include, but are not limited to, the development and operation of a call center; market research; customer retention; incentive programs; sales development programs; media planning; media buying fees; creating and producing advertising materials; outside advertising agency fees for creating advertising programs; public relation activities; outside public relations agency fees; technology investments; digital marketing; and reimbursing us the costs of administering the Advertising Fund.
Additionally, we may use up to ten percent (10%) of the Advertising Fund to solicit new franchisees.
The Advertising Fund is not a trust or escrow account, and we have no fiduciary obligations regarding the Advertising Fund.
We cannot ensure that any individual franchisees will benefit directly or on a pro rata basis from the future placement of any such advertising in its local market.
We may spend in any fiscal year an amount greater or less than the aggregate contributions to the Advertising Fund in that year.
We will determine the methods of advertising, media employed, and scope, contents, terms and conditions of advertising, marketing, promotional and public relations campaigns, and programs.
Upon written request, we will provide you an annual unaudited statement of the receipts and disbursements of the Advertising Fund for the most recent calendar year.
Any end-of-year surpluses or shortages in the Advertising Fund in a given year will carry over to the next year.
Source: Item 23 — RECEIPT (FDD pages 54–177)
What This Means (2025 FDD)
According to Christies International Real Estate's 2025 Franchise Disclosure Document, the franchisor reserves the right to implement a monthly advertising fee, termed the "Advertising Fund Fee," which would be deposited into a system marketing fund called the "Advertising Fund." As of the effective date of the FDD, Christies International Real Estate has not established this Advertising Fund and is not collecting the Advertising Fund Fee from franchisees. However, they retain the right to implement, begin collecting, and even increase this fee at any time, provided they give written notice to the franchisee. The Advertising Fund Fee will not exceed three percent (3%) of the Gross Revenue.
If Christies International Real Estate begins collecting the Advertising Fund Fee, franchisees will be required to pay it in the same manner and at the same time as the Royalty Fee. All Advertising Fund Fees collected will be placed in the Advertising Fund, which Christies International Real Estate will manage. Notably, any Christies International Real Estate businesses operated directly by the franchisor or its affiliates will not be required to contribute to this Advertising Fund, creating a potential disparity in financial obligations between franchisees and company-owned operations.
The Advertising Fund is intended to cover expenses related to the general promotion of the Christies International Real Estate brand and system. These expenses may include a wide range of marketing and operational support activities, such as the development and operation of a call center, market research, customer retention programs, sales development programs, media planning and buying, creation of advertising materials, public relations, technology investments, and digital marketing. The fund can also be used to reimburse Christies International Real Estate for the costs of administering the Advertising Fund. Furthermore, the franchisor may allocate up to ten percent (10%) of the Advertising Fund to solicit new franchisees, which may or may not directly benefit existing franchisees.
It is important to note that the Advertising Fund is not a trust or escrow account, and Christies International Real Estate has no fiduciary obligations regarding its management. The franchisor retains full authority to determine the advertising methods, media channels, and the scope and content of advertising campaigns. While an annual unaudited statement of receipts and disbursements of the Advertising Fund will be provided to franchisees upon written request, Christies International Real Estate cannot guarantee that individual franchisees will directly benefit from advertising placements in their local markets. Any surpluses or shortages in the Advertising Fund at the end of a fiscal year will be carried over to the next year, allowing for flexibility in budgeting and spending.