What happens when the revenues of a Craters & Freighters advertising program exceed the related advertising expenses?

According to Craters & Freighters' 2025 Franchise Disclosure Document, when the revenues of an advertising program exceed the related advertising expenses, the company accrues advertising costs up to the amount of the revenues on an annual basis. This means that Craters & Freighters ensures that the advertising fund is used efficiently, and any excess revenue is balanced by accruing advertising costs, preventing the accumulation of unused funds.

For a prospective Craters & Freighters franchisee, this policy offers some assurance that advertising funds contributed through royalties are managed responsibly. The accrual of advertising costs up to the amount of revenues suggests that the franchisor is committed to investing in advertising to support the brand and its franchisees. This can help drive business and increase brand awareness, which benefits all franchisees.

However, the FDD does not specify exactly how these accrued advertising costs are utilized or distributed. A potential franchisee should seek clarification from Craters & Freighters regarding the specific mechanisms for using excess advertising revenues. Understanding the details of how these funds are allocated and the types of advertising activities they support is crucial for evaluating the overall value of the advertising program.