How does Cinch I.T. handle marketing costs?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
eting Fund Fee in the amount of one and one half percent (1.5%) of the Franchised Business' Gross Sales per month, or Two Hundred Dollars ($200.00) per month, whichever is greater, in order to develop and maintain a local, regional or national Marketing program.
- (b) The Marketing Fund will be administered by Us. We, in Our sole discretion will be responsible for (i) developing and implementing advertising and marketing programs for the benefit of Our entire System; (ii) deciding which media to use and under what terms; (iii) preparing and making available to all franchisees an annual statement of income and expenses upon written request; the cost of preparing the statements will be paid by the Marketing Fund; (iv) securing the services of advertising agencies or other marketing professionals; and (v) limiting expenditures from the Marketing Fund, to the extent possible, to those areas in which franchisees are contributing to the Marketing Fund. Funds not spent in any given fiscal year will be carried forward to the next year. We reserve the right to place additional local, regional or national advertising at Our expense. All Franchisor-owned units or affiliate-owned units, operating under the CINCH I.T. Mark, will contribute to the Marketing Fund on the same basis as franchised units. A portion of the total Marketing Fund may be used annually to reimburse Us or Our designees for advertising and marketing-related administrative costs, indirect expenses and subsidizing costs. As the CINCH I.T. System expands, We may establish an advertising council.
- (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.
- (d) Irrespective of the development or implementation of any local, regional or national advertising or marketing program by Us, after Your CINCH I.T. Franchised Business has been in operation for one (1) month, You are required to spend a minimum of One Thousand Dollars ($1,000.00) per month on Franchisor directed local advertising and marketing programs for the remaining term of Your Franchise Agreement. We will provide You with copies of Our available marketing and advertising material, if You desire, at no cost via Our Intranet. In addition, You
may do Your own advertising and marketing, or hire an agency, but in either event, You must obtain Our prior written approval of all advertising and marketing materials that You desire to use at least thirty (30) days before the implementation of such advertising and marketing, unless such materials have been previously approved by Us. You shall submit such materials to Us by personal delivery or through the mail, "Return Receipt Requested" or sent by overnight delivery paid for by sender. You shall not use such materials until they have been approved by Us in writing and shall promptly discontinue use of any advertising or promotional materials upon Our request. Any materials submitted by You to Us that have not been approved or disapproved, in writing, within fifteen (15) days of receipt thereof by Us, shall be deemed disapproved.
- (e) You agree to conduct a Grand Opening Marketing and Promotional Program for the CINCH I.T. Franchised Business at the time and in the manner specified by Us and agree to spend a minimum of Four Thousand Dollars ($4,000.00) for the grand opening program. You agree to provide Us with a summary of the grand opening program expenditures within sixty (60) days after the CINCH I.T. Franchised Business opens. Your grand opening program must utilize the marketing and advertising materials that We have either developed or approved.
- (f) Except when advertising cooperatively with other franchisees or with Us, You are prohibited from advertising or marketing Your Franchised Business outside Your Designated Territory. Unless granted specific written permission to the contrary, Your local advertising activity is limited to approved social media, direct marketing, targeted print and broadcast media, speaking engagements, networking events and all other types of activity designed to encourage and solicit business only within Your Designated Territory.
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. administers a marketing fund, and franchisees are also required to spend a minimum amount on local advertising. Cinch I.T. has sole discretion over the marketing fund, including developing and implementing advertising programs, deciding which media to use, preparing annual statements of income and expenses (upon written request), securing advertising agencies, and limiting expenditures to areas where franchisees contribute to the fund. Funds not spent in a fiscal year are carried forward. Cinch I.T. also reserves the right to place additional advertising at its own expense, and all franchisor-owned or affiliate-owned units contribute to the marketing fund on the same basis as franchised units. A portion of the marketing fund may be used to reimburse Cinch I.T. for advertising and marketing-related administrative costs and indirect expenses. Cinch I.T. may establish an advertising council as the system expands.
After the Cinch I.T. franchised business has been in operation for one month, franchisees are required to spend a minimum of $1,000 per month on franchisor-directed local advertising and marketing programs for the remaining term of the Franchise Agreement. Franchisees must also spend a minimum of $4,000 for a grand opening marketing and promotional program, utilizing materials developed or approved by Cinch I.T., and provide a summary of expenditures within 60 days of opening.
Franchisees can create their own advertising and marketing, or hire an agency, but must obtain Cinch I.T.'s prior written approval at least 30 days before implementation, unless the materials have been previously approved. Cinch I.T. will provide copies of available marketing and advertising material at no cost via their Intranet. Franchisees are generally prohibited from advertising outside their designated territory, with local advertising limited to approved social media, direct marketing, targeted print and broadcast media, speaking engagements, and networking events within the territory. Cinch I.T. reserves the right to require franchisees to cooperate in special promotional events and can require participation in advertising through media sources outside a franchisee's designated territory if the territory lies within an Area of Dominant Influence (ADI) or Designated Market Area (DMA) that includes other franchised or company-owned units.