Does Craters & Freighters derive revenue from franchisee's Marketing Fund Contributions?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor does not guarantee that advertising expenditures from the Marketing Fund will benefit Franchisee or any other franchisee directly, on a pro rata basis,
or at all. Franchisor does not derive revenue or any other material consideration as a result of Franchisee's Marketing Fund Contributions. Franchisor is not required to spend an amount from the Marketing Fund on local marketing or advertising in Franchisee's Territory. Franchisor does not spend any of funds collected by the Marketing Fund on directly soliciting new franchisees. Any unused funds in any calendar year will be applied to the following year's funds, and Franchisor reserves the right to contribute or loan additional funds to the Marketing Fund on any terms Franchisor deems reasonable. Upon request, Franchisor will make available to Franchisee an annual accounting for the Marketing Fund that shows how the Marketing Fund proceeds have been spent for the previous year.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, Craters & Freighters does not derive revenue or any other material consideration from franchisee contributions to the Marketing Fund. The purpose of the Marketing Fund is to maximize general brand recognition for the Craters & Freighters system.
The FDD specifies that Craters & Freighters is not obligated to spend Marketing Fund monies on behalf of a franchisee or in proportion to a franchisee's contributions. Furthermore, Craters & Freighters does not guarantee that advertising expenditures from the Marketing Fund will directly benefit any franchisee on a pro rata basis.
Craters & Freighters may use the Marketing Fund to cover costs associated with marketing, advertising, and promotional efforts, including direct mail, promotions, call centers, market research, public relations, website maintenance, and agency fees. These costs may also include a proportionate share of employee salaries and overhead expenses related to marketing activities. At the franchisee's request, Craters & Freighters will provide an annual accounting of the Marketing Fund, detailing how the funds were spent in the previous year.