Can the Craters & Freighters Marketing Fund be used for independent audits?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor, any Affiliate of Franchisor, and Franchisor's authorized representatives may be reimbursed from the Marketing Fund for administrative costs, independent audits, reasonable accounting, bookkeeping, reporting and legal expenses, taxes and all other reasonable direct or indirect expenses that Franchisor, any Affiliate of Franchisor, and Franchisor's authorized representatives may incur relating to programs funded by the Marketing Fund.
The Marketing Fund is intended to maximize the general brand recognition of the System, and Franchisor 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.
Franchisor does not guarantee that advertising expenditures from the Marketing Fund will benefit Franchisee or any other franchisee directly, on a pro rata basis,
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, the Marketing Fund can be used to cover the costs of independent audits. Specifically, Craters & Freighters, its affiliates, and authorized representatives can be reimbursed from the Marketing Fund for expenses related to programs funded by the Marketing Fund. These expenses include administrative costs, independent audits, and reasonable accounting, bookkeeping, reporting, and legal expenses.
This means that a portion of the funds contributed by franchisees to the Marketing Fund may be used by Craters & Freighters to pay for independent audits related to the marketing and promotional activities. This is a fairly standard practice in franchising, as it ensures transparency and accountability in how the Marketing Fund is managed.
However, the FDD also states that Craters & Freighters is not obligated to spend Marketing Fund monies on any franchisee's behalf or benefit, nor are they required to expend funds equivalent or proportionate to a franchisee's contributions. Furthermore, Craters & Freighters does not guarantee that advertising expenditures from the Marketing Fund will benefit any franchisee directly or on a pro rata basis. This indicates that while the Marketing Fund can be used for independent audits, there is no guarantee that these audits will directly benefit individual franchisees.
Prospective franchisees should be aware that the Marketing Fund is intended to maximize the general brand recognition of the Craters & Freighters system. While independent audits can help ensure the fund is managed responsibly, franchisees should not expect a direct or proportionate return on their contributions.