Is the Cinch I.T. Marketing Fund considered a trust?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
tion 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.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, the Marketing Fund is not considered a trust, and Cinch I.T. is not a fiduciary or trustee of the Marketing Fund. However, Cinch I.T. retains the option to separately incorporate the Marketing Fund or establish a Marketing Fund trust in the future, where they could act as the trustee.
Cinch I.T. will administer the Marketing Fund and is responsible for developing and implementing advertising and marketing programs for the benefit of the entire Cinch I.T. system. This includes 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 will be carried forward to the next year.
Even with the existence of a marketing program by Cinch I.T., franchisees are required to spend a minimum of $1,000 per month on franchisor-directed local advertising and marketing programs after their Cinch I.T. Franchised Business has been in operation for one month. This requirement remains for the duration of the Franchise Agreement. This local advertising requirement is in addition to the Marketing Fund Fee, which as of the date of the Agreement, is 1.5% of the Franchised Business' Gross Sales per month, or $200 per month, whichever is greater.