Does Craters & Freighters count contributions to a Cooperative towards the required Individual Advertising Expense?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Each year, you must spend the greater of (a) $6,000, or (b) one percent (1%) of your Adjusted Gross Sales for the prior calendar year, on advertising and promotion of your Franchised Business in your Territory ("Individual Advertising Expense"). In either case, the amount of the Individual Advertising Expense will not exceed $18,000. You must submit annual reports to us reflecting your advertising expenditures. These funds are reserved only for marketing, promotions, and advertising of your Franchised Business. This expense will be incurred in addition to your required contributions to the Marketing Fund, as described below. You may not advertise outside your Territory without our approval, which may be withheld in our sole discretion. We reserve the right to require you to pay the amount of the Individual Advertising Expense to an approved supplier of ours. We will count all amounts you contribute to a Cooperative towards your required Individual Advertising Expense.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 22–29)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, contributions to a Cooperative can be counted toward the Individual Advertising Expense. Each year, a franchisee must spend the greater of $6,000 or 1% of the prior calendar year's Adjusted Gross Sales on local advertising, up to a maximum of $18,000. This is in addition to the Marketing Fund contribution.
Franchisees are required to submit annual reports detailing their advertising expenditures to Craters & Freighters. These funds are specifically designated for marketing, promotions, and advertising within the franchisee's territory. Franchisees need to obtain approval from Craters & Freighters before advertising outside of their designated territory.
Craters & Freighters retains the right to mandate that franchisees allocate their Individual Advertising Expense to an approved supplier. The document explicitly states that all contributions made to a Cooperative will be credited towards the franchisee's required Individual Advertising Expense. This provides franchisees with an avenue to satisfy their local advertising obligations through participation in a Cooperative, if one exists in their area.