What is the required use of the Individual Advertising Expense funds for a Craters & Freighters franchise?
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. |
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 specific amount annually on local advertising and promotion. This Individual Advertising Expense is the greater of $6,000 or 1% of the franchisee's Adjusted Gross Sales from the prior calendar year, but will not exceed $18,000.
Craters & Freighters requires franchisees to use these funds exclusively for marketing, promotions, and advertising of their franchised business within their designated territory. Franchisees must also submit annual reports to Craters & Freighters detailing these advertising expenditures, ensuring compliance with the brand's marketing standards.
It is important to note that Craters & Freighters retains the right to direct franchisees to pay the Individual Advertising Expense to a designated or approved supplier. This means that while franchisees are responsible for spending the required amount on advertising, Craters & Freighters can mandate that these funds be channeled through specific vendors they have selected. Franchisees should clarify with Craters & Freighters which advertising methods are pre-approved to ensure compliance.