What is the maximum amount a Craters & Freighters franchisee must spend annually on Individual Advertising Expense?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Individual Advertising Expense | Greater of (a) $6,000, or (b) one percent (1%) of your Adjusted Gross Sales for the prior calendar year. In either case, this amount will not exceed $18,000. | As incurred. | Each year, you must spend this amount on advertising and promotion of your Franchised Business in your Territory. You must submit annual reports to us reflecting advertising expenditures, which must be utilized only for marketing, promotions, and advertising of the Franchised Business. We reserve the right to require you to pay the amount of the Individual Advertising Expense to a designated or approved supplier of ours. |
| Technology Fee | Currently $500 per month. We reserve the right to increase this amount upon 30 days written notice to you. However, this amount will not exceed $750 per month. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, franchisees are required to spend a certain amount annually on individual advertising. This expense is the greater of $6,000 or 1% of the franchisee's Adjusted Gross Sales from the prior calendar year. However, the document specifies that in either scenario, the individual advertising expense will not exceed $18,000 annually.
This means that even if 1% of a franchisee's Adjusted Gross Sales exceeds $18,000, their required individual advertising expense is capped at $18,000. Franchisees must allocate these funds towards advertising and promoting their Craters & Freighters business within their designated territory.
Craters & Freighters requires franchisees to submit annual reports detailing their advertising expenditures, ensuring that the funds are used specifically for marketing, promotions, and advertising of the franchised business. The franchisor also retains the right to direct franchisees to pay the Individual Advertising Expense to a designated or approved supplier.