Can Craters & Freighters reimburse themselves from the Marketing Fund for taxes?

According to Craters & Freighters' 2025 Franchise Disclosure Document, Craters & Freighters, its affiliates, and their authorized representatives can be reimbursed from the Marketing Fund for various expenses. These expenses include administrative costs, independent audits, reasonable accounting, bookkeeping, reporting, and legal expenses. Crucially, this also extends to taxes and all other reasonable direct or indirect expenses related to programs funded by the Marketing Fund.

This means that Craters & Freighters has the ability to use the Marketing Fund, which is contributed to by franchisees, to cover tax expenses incurred by themselves or their affiliates related to marketing programs. This is a fairly standard practice in franchising, as the franchisor often manages the marketing fund and incurs expenses on behalf of the entire system.

For a prospective Craters & Freighters franchisee, this indicates that a portion of their Marketing Fund contributions could be used to cover the franchisor's tax obligations related to marketing activities. While this is permitted, the FDD also states that Craters & Freighters will provide an annual accounting of the Marketing Fund's expenditures upon request, allowing franchisees to review how the funds are being utilized.