What is included in the Individual Advertising Expense for a Craters & Freighters franchise?
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 the 2025 Craters & Freighters FDD, franchisees are required to allocate funds towards advertising and promotion within their designated territory. This is termed the "Individual Advertising Expense." Each year, a Craters & Freighters franchisee must spend the greater of $6,000 or 1% of their Adjusted Gross Sales from the previous calendar year on local advertising. However, the maximum amount required for this expense is capped at $18,000.
These funds are specifically earmarked for marketing, promotions, and advertising initiatives directly benefiting the franchisee's Craters & Freighters business. It's important to note that this individual advertising expense is separate from, and in addition to, the mandatory contributions to the national Marketing Fund.
The FDD specifies that Craters & Freighters franchisees must submit annual reports detailing their advertising expenditures to the franchisor. While franchisees have some autonomy in their local advertising efforts, they are restricted from advertising outside their designated territory without prior written approval from Craters & Freighters. Furthermore, Craters & Freighters retains the right to mandate that franchisees allocate their Individual Advertising Expense through approved suppliers. Any contributions made to a Cooperative advertising program will count towards fulfilling the Individual Advertising Expense requirement.