What is the purpose of the 'Marketing Fund' for Crave Cookies franchises?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
ional, 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. The foregoing includes such activities and expenses as Crave Cookies Franchising reasonably determines, and may include, without limitation: development and placement of advertising and promotions; sponsorships; contests and sweepstakes; development of décor, trade dress, Marks, and/or branding; development and maintenance of brand websites; social media; internet activities; e-commerce programs; search engine optimization; market research; public relations, media or agency costs; trade shows and other events; printing and mailing; and administrative and overhead expenses related to the Marketing Fund (including the compensation of Crave Cookies Franchising's employees working on marketing and for accounting, bookkeeping, reporting, legal and other expenses related to the Marketing Fund).
(c) Discretion. Franchisee agrees that expenditures from the Marketing Fund need not be proportionate to contributions made by Franchisee or provide any direct or indirect benefit to Franchisee. The Marketing Fund will be spent at Crave Cookies Franchising's sole discretion, and Crave Cookies Franchising has no fiduciary duty with regard to the Marketing Fund.
(d) Contribution by Other Outlets. Crave Cookies Franchising is not obligated to (i) have all other Crave Cookies businesses (whether owned by other franchisees or by Crave Cookies Franchising or its affiliates) contribute to the Marketing Fund, or (ii) have other Crave Cookies businesses that do contribute to the Marketing Fund contribute the same amount or at the same rate as Franchisee.
(e) Surplus or Deficit. Crave Cookies Franchising may accumulate funds in the Marketing Fund and carry the balance over to subsequent years. If the Marketing Fund operates at a deficit or requires additional funds at any time, Crave Cookies Franchising may loan such funds to the Marketing Fund on reasonable terms.
(f) Financial Statement. Crave Cookies Franchising will prepare 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.
9.4 Market Cooperatives. Crave Cookies Franchising may establish market advertising and promotional cooperative funds ("Market Cooperative") in any geographical areas.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the Marketing Fund is used for marketing, advertising, and public relations at the local, regional, national, and international levels. This includes the development and placement of advertising and promotions, sponsorships, contests, sweepstakes, and the development of décor, trade dress, Marks, and branding. The fund also covers the development and maintenance of brand websites, social media, internet activities, e-commerce programs, search engine optimization, market research, public relations, media or agency costs, trade shows, other events, printing and mailing, and administrative and overhead expenses related to the Marketing Fund.
Crave Cookies Franchising has sole discretion over how the Marketing Fund is spent, and expenditures do not need to be proportionate to individual franchisee contributions or provide any direct or indirect benefit to a specific franchisee. Crave Cookies Franchising is not obligated to have all Crave Cookies businesses contribute to the Marketing Fund or contribute the same amount. This means that while franchisees are required to contribute, they may not see a direct or equal return on their investment compared to other franchisees or corporate-owned locations.
Crave Cookies Franchising may accumulate funds in the Marketing Fund and carry the balance over to subsequent years. If the Marketing Fund operates at a deficit, Crave Cookies Franchising may loan funds to the Marketing Fund on reasonable terms. Franchisees are entitled to receive an unaudited annual financial statement of the Marketing Fund within 120 days of the close of Crave Cookies Franchising's fiscal year, upon request. This provides some transparency into how the funds are being managed, even though Crave Cookies Franchising has broad discretion over its use.
Franchisees are required to pay a Marketing Fund Contribution equal to 2% of their Gross Sales, which is collected at the same time as the Royalty Fee. This mandatory contribution ensures a steady stream of revenue into the Marketing Fund, which Crave Cookies Franchising then uses to promote the brand and system as a whole. While franchisees have to contribute to the fund, they do not have control over how the funds are spent, as Crave Cookies Franchising has the sole discretion.