What is the 'Marketing Fund Contribution' for a Craters & Freighters franchise, as referenced in the agreement?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
um Performance Standards, Franchisor will have the right to reduce the size of, or otherwise modify, Franchisee's Territory upon providing 30 days' written notice to Franchisee.
- 3.4 Marketing Fund Contribution. Franchisee must pay to Franchisor a contribution to the Marketing Fund ("Marketing Fund Contribution") equal to one percent (1%) of the Adjusted Gross Sales generated by the Franchised Business during the previous month, payable monthly at
the same time and in the same manner as the monthly Royalty Fee.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, franchisees are required to contribute to the Marketing Fund. The standard 'Marketing Fund Contribution' is equal to one percent (1%) of the Adjusted Gross Sales generated by the Franchised Business during the previous month. This contribution is payable monthly, coinciding with the payment of the monthly Royalty Fee.
Craters & Freighters retains the right to increase this contribution, but it is capped at two percent (2%) of the Adjusted Gross Sales. Should Craters & Freighters decide to increase the contribution, they must provide the franchisee with thirty (30) days' notice before the change takes effect.
'Adjusted Gross Sales' is defined as the total revenue received from customers for services and products sold by the franchise, including sales made on or off the premises. This includes payments made via cash, credit, checks, gift certificates, coupons, services, property, or other means of exchange. Excluded from this calculation are federal, state, and municipal sales or services taxes collected from customers and remitted to the appropriate taxing authority. This means the marketing contribution is based on the business's gross sales less any sales taxes collected.