Does Crave Cookies Franchising have a fiduciary duty with regard to the Marketing Fund for Crave Cookies?

According to Crave Cookies' 2025 Franchise Disclosure Document, Crave Cookies Franchising does not have a fiduciary duty with regard to the Marketing Fund. The FDD specifies that the Marketing Fund will be spent at Crave Cookies Franchising's sole discretion. This means that Crave Cookies has the authority to make decisions about how the Marketing Fund is used without being legally obligated to prioritize the financial interests of its franchisees above its own.

This lack of fiduciary duty gives Crave Cookies significant control over the Marketing Fund. While the funds are supposed to be used for marketing, advertising, and public relations, the specific allocation and spending decisions are at Crave Cookies' discretion. Franchisees contribute 2% of their gross sales to the Marketing Fund, so understanding the implications of this arrangement is crucial.

While Crave Cookies Franchising does not have a fiduciary duty, it will provide an unaudited annual financial statement of the Marketing Fund within 120 days of the close of Crave Cookies Franchising's fiscal year, and will provide the financial statement to Franchisee upon request. This provides some transparency, allowing franchisees to see how the funds are being spent, even though they don't have direct control over those decisions. A prospective franchisee should carefully consider this aspect of the franchise agreement and seek clarification from Crave Cookies regarding their marketing strategies and how the Marketing Fund is managed.