What is the Marketing Fund used for regarding Craters & Freighters?
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. These costs may include the proportionate salary share of employees of ours or any Affiliate of ours who devote time and render services for marketing, advertising, or promotion, or the administration of the Marketing Fund; such costs may include administrative costs, salaries, and overhead expenses. No part of the Marketing Fund will be used by us to defray any of our general operating expenses, other than those reasonably allocable to the marketing, advertising, or promotional activities described here or other activities reasonably related to the administration or direction of the Marketing Fund. We, any Affiliate of ours, and our 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 we, any Affiliate of ours, and our 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 we are not obligated to expend Marketing Fund monies on your behalf or benefit or to expend Marketing Fund monies equivalent or proportionate to your contributions on your behalf or benefit. We do not guarantee that advertising expenditures from the Marketing Fund will benefit you or any other franchisee directly, on a pro rata basis, or at all. We do not derive revenue or any other material consideration as a result of your contributions to the Marketing Fund. We are not required to spend an amount from the Marketing Fund on local marketing or advertising in your Territory or the territory of any franchisee within our System. We do not spend any of funds collected by the Marketing Fund on directly soliciting new franchisees.
Any unused funds in any calendar year will be applied to the following year's funds, and we reserve the right to contribute or loan additional funds to the Marketing Fund on any terms we deem reasonable. Since the Marketing Fund is not audited, audited financial statements are not available to franchisees. 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, the Marketing Fund is used exclusively to promote the Craters & Freighters system. This includes creating and placing advertising in various media such as broadcast, print, electronic, direct mail, radio, and television. The fund also supports the development of promotional materials and public relations activities for the entire system or specific parts of it.
Specifically, the Marketing Fund covers costs related to direct mail advertising, local, regional, and national promotions, call centers, market research, public relations, website maintenance (including franchisee geosites), employing marketing and advertising agencies, purchasing promotional items, attending trade shows, and providing marketing materials and services to franchisees. These expenses may also include a portion of the salaries of Craters & Freighters' employees or affiliates who work on marketing, advertising, promotion, or the administration of the Marketing Fund, as well as administrative costs, salaries, and overhead.
The FDD specifies that the Marketing Fund will not be used for Craters & Freighters' general operating expenses, except for those directly related to marketing, advertising, or promotional activities, or the administration of the fund. Craters & Freighters, its affiliates, and authorized representatives may be reimbursed from the Marketing Fund for administrative costs, independent audits, accounting, bookkeeping, reporting, legal expenses, taxes, and other reasonable direct or indirect expenses related to programs funded by the Marketing Fund.
For the fiscal year ending December 31, 2024, Craters & Freighters reported the following expenditures from the Marketing Fund: 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, network software and hosting expenses, and network telephone supporting services. Craters & Freighters does not guarantee that advertising expenditures will directly benefit each franchisee and is not required to spend funds on local marketing in any specific territory. Unused funds at the end of the year are rolled over to the next year, and Craters & Freighters reserves the right to contribute or loan additional funds to the Marketing Fund.