What kind of reports must a Craters & Freighters franchisee submit regarding their advertising expenditures?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Each Cooperative established must prepare annual statements which will be available for review by its members.
Upon request, we will make available to you an annual accounting for the Marketing Fund that shows how the Marketing Fund proceeds have been spent for the previous year.
During our last fiscal year ending December 31, 2024, expenditures from the Marketing Fund were as follows: 2.6% on production, 81.5% on media placement, 3.5% on administrative expenses, and 12.4% on other expenditures relating to network sales and support, network software and hosting expenses, and network telephone supporting services.
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, franchisees may be required to participate in advertising cooperatives. If a cooperative is established in the franchisee's area, the franchisee must become a member and adhere to its rules. These cooperatives are formed to manage advertising programs and develop promotional materials, subject to Craters & Freighters' approval.
Each cooperative will set its own fees, capped at one percent of Adjusted Gross Sales, and must prepare annual statements available for review by its members. Craters & Freighters retains the right to form, change, dissolve, or merge any cooperative.
While franchisees can develop their own advertising materials with Craters & Freighters' written approval, Craters & Freighters maintains control over internet marketing and trademark usage online. The FDD states that upon request, Craters & Freighters will provide an annual accounting for the Marketing Fund, detailing how the funds were spent in the previous year. For the fiscal year ending December 31, 2024, the Marketing Fund expenditures included 2.6% on production, 81.5% on media placement, 3.5% on administrative expenses, and 12.4% on other expenditures.