What is the maximum Individual Advertising Expense a Craters & Freighters franchisee must spend each year?
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. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, franchisees are required to spend a minimum of $6,000 or 1% of their adjusted gross sales from the prior year on individual advertising expenses. However, the maximum amount a franchisee is required to spend on individual advertising each year is $18,000.
Craters & Freighters franchisees must allocate these funds towards advertising and promoting their franchised business within their designated territory. To ensure compliance, franchisees are obligated to submit annual reports detailing their advertising expenditures. These reports must demonstrate that the funds were used exclusively for marketing, promotions, and advertising purposes related to the Craters & Freighters business.
It's important to note that Craters & Freighters retains the right to mandate that franchisees pay their individual advertising expenses to a designated or approved supplier. This provision allows Craters & Freighters to maintain quality control and potentially negotiate better rates on behalf of its franchisees. Franchisees should factor this advertising expense into their overall budget and business plan, ensuring they can meet the minimum spending requirement while also maximizing the impact of their advertising efforts.