Is Crave Cookies Franchising permitted to establish a Marketing Fund?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
Cookies Franchising.
9.2 Use by Crave Cookies Franchising. Crave Cookies Franchising may use any marketing materials or campaigns developed by or on behalf of Franchisee, and Franchisee hereby grants an unlimited, perpetual, royalty-free license to Crave Cookies Franchising for such purpose.
9.3 Marketing Fund. Crave Cookies Franchising may establish a Marketing Fund to promote the System on a local, regional, national, and/or international level. If Crave Cookies Franchising has established a Marketing Fund:
(a) Separate Account. Crave Cookies Franchising shall hold the Marketing Fund Contributions from all franchisees in one or more bank accounts separate from Crave Cookies Franchising's other accounts.
(b) Use. Crave Cookies Franchising shall use the Marketing Fund only for marketing, advertising, and public relations materials, programs and campaigns (including at local, regional, national, and/or international level), and related overhead.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, Crave Cookies Franchising has the option to establish a Marketing Fund to promote the Crave Cookies system at the local, regional, national, or international level. If Crave Cookies Franchising establishes a Marketing Fund, it will maintain the contributions from all franchisees in a separate bank account.
Crave Cookies Franchising is obligated to use the Marketing Fund solely for marketing, advertising, and public relations purposes, which includes related overhead expenses. These expenses can cover a wide range of activities, such as developing and placing advertisements, sponsorships, contests, website maintenance, social media, market research, and administrative costs. Franchisees are required to contribute to this fund, as outlined elsewhere in the FDD, typically as a percentage of their gross sales.
The FDD stipulates that Crave Cookies Franchising has considerable discretion over how the Marketing Fund is spent, and these expenditures do not need to directly benefit each franchisee in proportion to their contributions. Crave Cookies Franchising is not obligated to ensure that all Crave Cookies businesses contribute equally (or at all) to the Marketing Fund. Furthermore, Crave Cookies Franchising can carry over any surplus funds to subsequent years or loan funds to the Marketing Fund if it operates at a deficit.
Crave Cookies Franchising will provide an unaudited annual financial statement of the Marketing Fund to franchisees upon request, within 120 days of the close of Crave Cookies Franchising's fiscal year. This provides a degree of transparency, allowing franchisees to review how the funds are being managed and spent. Additionally, Crave Cookies Franchising may also establish market advertising and promotional cooperative funds in specific geographic areas, requiring franchisees to participate and contribute between 1% and 5% of gross sales to these cooperatives.