What is the nature of the Cinch I.T. Marketing Fund?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
e integrity of the Brand. (Franchise Agreement Sections 17 and 19)
Marketing Program
We provide a national or regional marketing program. We charge you a 1.5% royalty, or a $200 monthly minimum, whichever is greater, to fund it. The Marketing Fund is administered by our members.
We and our designees will have the sole authority to direct all advertising, marketing, and promotional programs of the Marketing Fund and will have sole discretion over all aspects of those programs, including the concepts, materials, and media used and the placement and
allocation of them.
The Marketing Fund will be used, in our discretion, to pay for developing and conducting activities that we believe will enhance the goodwill associated with the Marks and the image of the CINCH I.T. System and to pay for the administration of the Marketing Fund and its programs. The purpose of the Marketing Fund is to pool marketing money from franchised businesses so as to achieve greater benefits for all in promoting the trade name and Marks.
For this reason, the Marketing Fund is not obligated to make expenditures for you or any other franchisee which are equivalent or proportionate to your or another franchisee's contribution, or to ensure that any particular franchisee benefits directly or pro rata from the marketing or promotion conducted by the Marketing Fund.
No portion of the Marketing Funds collected will be used principally to sell franchises. However, a brief statement about availability of information regarding the purchase of CINCH I.T. franchises may be included in advertising, marketing and other items produced and/or distributed using the Marketing Fund.
The Marketing Fund may elect to assist in the marketing of franchises in otherwise weak markets, and to assist franchises that are slow to ramp up by providing additional marketing dollars.
The Marketing Fund may be used to pay for market research, media space, branding, public relations, sponsorships, partnerships, and other activities designed to promote the organization, the trade name and the Marks; travel and related miscellaneous expenses; conducting Internetbased advertising and marketing campaigns; utilizing social and business networking media sites and other emerging media or promotional tactics; developing, maintaining, and updating our Website on the Internet; search engine optimization; media buying; print, radio, television, direct mail, or other promotions; providing promotional and other marketing materials and services to the businesses operating under the CINCH I.T. System, or any combination of these. We will direct all programs financed by the Marketing Fund, with sole discretion over the creative concepts and materials.
The Marketing Fund may be used to cover our or our designee's costs and overhead for activities reasonably related to the administration of the Marketing Fund, including costs and salaries of our or our designee's personnel who perform services for the Marketing Fund.
In our most recent fiscal year, 2023, the Marketing Fund collected $124,851 and expended $80,711 as follows:
| Website Development | 10% |
|---|---|
| SEO | 35% |
| Online Marketing/Social | 35% |
| Media | |
| Public Relations | 20% |
| Total | 100% |
No portion of the marketing fund was used to solicit new franchisees.
All franchisees and our affiliate, CINCH I.T.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 28–39)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the company has a national or regional marketing program, funded by a 1.5% royalty fee, with a minimum of $200 monthly payment from franchisees, whichever is greater. The Marketing Fund is administered by Cinch I.T.'s members. Cinch I.T. has sole authority to direct all advertising, marketing, and promotional programs of the Marketing Fund, including the concepts, materials, media used, and their placement and allocation. The purpose of the Marketing Fund is to pool marketing money from franchised businesses to achieve greater benefits for all in promoting the trade name and Marks.
The Marketing Fund will be used to enhance the goodwill associated with the Marks and the image of the Cinch I.T. system, as well as to cover the administration of the Marketing Fund and its programs. The fund is not obligated to make expenditures equivalent or proportionate to any franchisee's contribution or ensure any particular franchisee benefits directly or pro rata from the marketing or promotion conducted by the Marketing Fund. No portion of the Marketing Funds collected will be used principally to sell franchises, although a brief statement about the availability of Cinch I.T. franchises may be included in advertising and marketing materials.
The Marketing Fund may assist in marketing franchises in weak markets or those that are slow to ramp up by providing additional marketing dollars. It may also be used for market research, media space, branding, public relations, sponsorships, partnerships, Internet-based advertising and marketing campaigns, social and business networking media sites, website development, search engine optimization, media buying, print, radio, television, direct mail, and other promotions. In the most recent fiscal year, 2023, the Marketing Fund collected $124,851 and expended $80,711. Cinch I.T. will maintain separate bookkeeping accounts for the Marketing Fund and will prepare income and expense statements annually, available to franchisees upon written request. Excess funds not spent in any given fiscal year will be carried forward to the next fiscal year.