Can the Craters & Freighters Marketing Fund be used for purchasing promotional items?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
The Marketing Fund will be used exclusively for the purpose of promoting the System. We may expend Marketing Fund monies towards the creation, production, and/or placement of advertising in local, regional, or national media including, but not limited to, broadcast, print, electronic, direct mail, radio, television, or other media), developing promotional materials, and undertaking public relations activities on behalf of the entire System or on behalf of a particular portion of the System. The Marketing Fund may also be used to meet any and all costs of maintaining, administering, directing, and preparing marketing, advertising, and promotional efforts and programs including, but not limited to: direct mail advertising; local, regional, and national promotions; call centers; market research; public relations activities; developing and maintaining Franchisor's Website and franchisee geosites (including your Geosite); employing marketing, advertising, and public relations agencies (including the payment of commissions); purchasing promotional items; attending trade shows; providing other marketing materials and services to franchised businesses operating under the System; and other marketing, advertising, and promotional activities.
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 Franchise Disclosure Document, the Marketing Fund can be used for purchasing promotional items. Craters & Freighters franchisees are required to contribute to this fund, with the contribution set at one percent (1%) of monthly Adjusted Gross Sales, but Craters & Freighters has the right to increase it to two percent (2%) with a 30-day notice.
The Marketing Fund is intended to promote the Craters & Freighters system, and the funds may be used for various marketing, advertising, and promotional activities. These activities include creating and placing advertisements in different media, developing promotional materials, and conducting public relations. Specifically, the fund can cover costs related to direct mail advertising, local, regional, and national promotions, call centers, market research, website maintenance, and employing marketing agencies.
For a Craters & Freighters franchisee, this means that a portion of their sales is allocated to a central fund managed by the franchisor for system-wide marketing efforts. While the franchisee contributes to the fund, Craters & Freighters is not obligated to spend the money in proportion to the franchisee's contribution or guarantee direct benefits. Franchisees should also note that the Marketing Fund is not audited, although an annual accounting of how the funds were spent will be made available upon request.
In the fiscal year ending December 31, 2024, Craters & Freighters allocated the Marketing Fund as follows: 2.6% on production, 81.5% on media placement, 3.5% on administrative expenses, and 12.4% on other expenditures related to network sales and support. This breakdown gives prospective franchisees an idea of how Craters & Freighters has used the Marketing Fund in the past.