factual

Is Cinch I.T. a fiduciary or trustee of the Marketing Fund?

Q: Is Cinch I.T. a fiduciary or trustee of the Marketing Fund?

- (c) We will maintain separate bookkeeping accounts for the Marketing Fund and may, but will not be required to cause Marketing Fund contributions to be deposited into one or more separate bank accounts. The Marketing Fund is not a trust, and We are not a fiduciary or trustee of the Marketing Fund or the monies in the Marketing Fund. However, We may, in Our discretion, separately incorporate the Marketing Fund or create a Marketing Fund trust, over which We may be the trustee, into which Marketing Fund contributions may be deposited. Source: Item 23 — RECEIPTS (FDD pages 60–269)

Cinch_I_T Franchise · 2024 FDD

Answer from 2024 FDD Document

(c) We will maintain separate bookkeeping accounts for the Marketing Fund and may, but will not be required to cause Marketing Fund contributions to be deposited into one or more separate bank accounts.

The Marketing Fund is not a trust, and We are not a fiduciary or trustee of the Marketing Fund or the monies in the Marketing Fund.

However, We may, in Our discretion, separately incorporate the Marketing Fund or create a Marketing Fund trust, over which We may be the trustee, into which Marketing Fund contributions may be deposited.

Source: Item 23 — RECEIPTS (FDD pages 60–269)

What This Means (2024 FDD)

According to Cinch I.T.'s 2024 Franchise Disclosure Document, Cinch I.T. is not a fiduciary or trustee of the Marketing Fund. The document explicitly states that the Marketing Fund is not a trust and that Cinch I.T. does not have those responsibilities. However, Cinch I.T. retains the option to separately incorporate the Marketing Fund or establish a Marketing Fund trust in the future, in which case Cinch I.T. could assume the role of trustee.

Cinch I.T. will administer the Marketing Fund and has sole discretion over various aspects, including developing marketing programs, selecting media, preparing financial statements, securing advertising agencies, and limiting expenditures to areas where franchisees contribute. Funds that are not spent in a fiscal year will be carried forward to the next year. Cinch I.T. also reserves the right to place additional advertising at its own expense.

This arrangement means that while franchisees contribute to the Marketing Fund, Cinch I.T. has significant control over how the funds are spent. While Cinch I.T. is not legally bound by fiduciary duties, they may choose to establish a trust in the future. Franchisees are required to spend a minimum of $1,000 per month on local advertising directed by Cinch I.T. after their business has been in operation for one month.

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.

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