Is a Craters & Freighters franchisee required to contribute to the national marketing fund?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
to Franchisee an annual accounting for the Marketing Fund that shows how the Marketing Fund proceeds have been spent for the previous year.
- 9.3 Individual Advertising Expense. Franchisee must expend the Individual Advertising Expense in accordance with Section 3.5 of this Agreement. Franchisee may not market or advertise in violation of federal laws regulating advertising, such as the CAN-SPAM Act and the TCPA, and state advertising laws applicable to the Franchised Business.
- 9.4 Internet Marketing by Franchisor Only. Franchisor has the sole right to market on the Internet and use the Marks on the Internet, including all use of websites, domain names, URLs, directory addresses, email addresses, metatags, linking, advertising, co-branding and other arrangements, and in all other forms of electronic media. Franchisee may not separately register any domain name or any portion of a domain name containing the Marks or participate or market on any website or other form of electronic media (including social technology, social media and social networking platforms) using the Marks unless Franchisee first obtains written approval from Franchisor. Franchisee's general conduct on the Internet or other forms of electronic media, including Franchisee's use of the Marks or any advertising, is subject to the terms and conditions of this Agreement and any other rules, requirements or policies that Franchisor may establish from time to time as set forth in the Operations Manuals or otherwise.
- 9.5 Marketing and Advertising Materials. All marketing and advertising plans and materials utilized or distributed in any medium by Franchisee must comply with Franchisor's branding standards as set forth in the Operations Manuals or otherwise and must be approved by Franchisor or Franchisor's designee. Such plans and materials must be submitted to, and approved by, Franchisor prior to being utilized or distributed by Franchisee. Upon receipt of such materials, Franchisor will have thirty (30) days to review such plans and materials and notify Franchisee of Franchisor's approval or rejection of such plans and materials. If Franchisor does not notify Franchisee of its approval prior to the expiration of such thirty (30) day period, the proposed materials will be deemed rejected by Franchisor. Any plans or materials submitted by Franchisee to Franchisor will immediately become Franchisor's property and Franchisor will retain all rights and interests in such plans and materials. Once approved by Franchisor, Franchisee may use such plans or materials for a period of one (1) year, unless Franchisor establishes a different time period for use and distribution when providing its approval, including a shorter or longer period of time. Franchisor reserves the right to require Franchisee to include certain language on any marketing or advertising carried out by Franchisee.
- 9.6 Franchisee Geosite. Within the Franchisee Geosite developed by Franchisor for the Franchised Business, Franchisee will have the ability to provide input for local content and specific
approved product, service, and industry topics to promote its areas of emphasis for its local market, subject to the requirements set forth in Section 9.5 above. Franchisee may not develop its own individual location website or any other Internet presence.
- 9.7 Call Center. Franchisor reserves the right to establish, operate, or contract with one or more call centers for the purpose of receiving incoming telephone calls or other communications from prospective customers and/or placing outbound telephone calls or other communications to prospective customers. Such call center(s) may be operated by Franchisor, an Affiliate of Franchisor, or an independent third-party. Franchisor may, but is not obligated to, allocate business generated by such telephone calls or other communications to Franchisee;
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
Based on the 2025 Craters & Freighters Franchise Disclosure Document, franchisees are required to expend money on advertising. Specifically, franchisees must expend money on Individual Advertising Expense, as stated in Section 9.3 of the agreement.
Additionally, if a Cooperative is established for a geographic area where the Franchised Business is located, the franchisee must become a member of the Cooperative and abide by its rules. All amounts contributed by the franchisee to a Cooperative will count towards the Individual Advertising Expense. Craters & Freighters reserves the right to form, change, or dissolve any such Cooperative at any time.
Craters & Freighters also reserves the right to use Marketing Fund monies for call centers. The marketing fund is intended to maximize the general brand recognition of the System, and Craters & Freighters is not obligated to expend Marketing Fund monies on Franchisee's behalf or benefit or to expend Marketing Fund monies equivalent or proportionate to Franchisee's contributions or Franchisee's benefit. Craters & Freighters does not guarantee that advertising expenditures from the Marketing Fund will benefit Franchisee or any other franchisee directly, on a pro rata basis.