Is the Clean Your Dirty Face Marketing Fund considered a trust?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
The Marketing Fund is not our asset. Although the Marketing Fund is not a trust, we will hold all Marketing Fund Contributions for the benefit of the contributors and use contributions only for the purposes described in this Section. We do not have any fiduciary obligation for administering the Marketing Fund or for any other reason. The Marketing Fund may spend in any fiscal year more or less than the total Marketing Fund Contributions in that year, borrow from us or others (paying reasonable interest) to cover deficits, or invest any surplus for future use. We will use all interest earned on Marketing Fund Contributions to pay costs before using the Marketing Fund's other assets. Any funds remaining in the Marketing Fund at the end of the year will roll over to the next year.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 24–39)
What This Means (2025 FDD)
According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, the Marketing Fund is not considered a trust. However, Clean Your Dirty Face states that it will hold all Marketing Fund contributions for the benefit of the contributors and use the contributions only for the purposes described in the FDD.
Clean Your Dirty Face explicitly states that it does not have any fiduciary obligation for administering the Marketing Fund or for any other reason. This means that while the funds are to be used for the benefit of the franchisees, Clean Your Dirty Face is not legally bound to act in the franchisees' best financial interest in the same way a trustee would be.
Clean Your Dirty Face retains significant control over the Marketing Fund, including the ability to spend more or less than the total contributions in a given year, borrow funds, and invest any surplus. Any interest earned on Marketing Fund Contributions will be used to pay costs before using the Marketing Fund's other assets, and any funds remaining in the Marketing Fund at the end of the year will roll over to the next year. These stipulations provide Clean Your Dirty Face with flexibility in managing the Marketing Fund, but also highlight the importance of franchisees understanding how the fund is being managed and ensuring transparency in its operations.