Who administers the Crab N Spice Marketing Fund?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
commended) procedures for our system.
- F. Marketing Fund. We will administer the Marketing Fund. (Section 5.5).
- G. Website. We will maintain a website for the Crab N Spice brand, which will include your business information and telephone number. (Section 5.5)
Advertising
Our obligation. We will use the Marketing Fund only for marketing and related purposes and costs. Media coverage is primarily local. We use outside vendors and consultants to produce advertising. We are not required to spend any amount of advertising in the area or territory where any particular franchisee is located. We will maintain the brand website (which will be paid for by the Marketing Fund). We have no other obligation to conduct advertising.
Your own advertising material. You may use your own advertising or marketing material only with our approval. To obtain our approval, you must submit any proposed advertising or marketing material at least 14 days prior to use. If we do not respond, the material is deemed rejected. If you develop any advertising or marketing materials, we may use those materials for any purpose, without any payment to you.
Advertising council. We do not have an advertising council composed of franchisees. The franchise agreement does not give us the power to form an advertising council.
Local or Regional Advertising Cooperatives. We do not currently have any local or regional advertising cooperatives. We have the right to require you to participate in a local or regional advertising cooperative. We will define the area of the cooperative based on media markets, or other geographic criteria that we deem appropriate. Each franchisee in the area would have one vote per outlet (unless the franchisee is in default under its franchise agreement). The amount you must contribute to the cooperative will be determined by vote of the members, but not less than 1% of gross sales.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 20–27)
What This Means (2024 FDD)
According to the 2024 Crab N Spice Franchise Disclosure Document, Crab N Spice administers the Marketing Fund. Franchisees are required to contribute 1% of their gross sales per week to the Marketing Fund, although Crab N Spice retains the right to have different franchisees contribute different amounts or rates. Company-owned outlets are not obligated to contribute to the Marketing Fund.
The FDD states that the Marketing Fund is not audited, but Crab N Spice will make unaudited annual financial statements available to franchisees upon request. Because Crab N Spice is a new franchisor, no money was spent from the Marketing Fund in the most recently concluded fiscal year. If funds are not fully spent in the fiscal year they accrue, the remaining money will stay in the Marketing Fund for use in the following year. No money from the Marketing Fund is used to solicit new franchise sales.
Crab N Spice will use the Marketing Fund only for marketing and related purposes and costs. Media coverage is primarily local, and outside vendors and consultants are used to produce advertising. Crab N Spice is not required to spend any specific amount of advertising in the area or territory where any particular franchisee is located. Crab N Spice will maintain the brand website, which will be paid for by the Marketing Fund, but has no other obligation to conduct advertising. Franchisees may use their own advertising or marketing material only with Crab N Spice's approval, which requires submission at least 14 days prior to use; failure to respond constitutes rejection. Crab N Spice may use franchisee-developed materials for any purpose without payment.