What does a Crawlspace Medic franchisee agree to regarding the Brand Fund?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor reserves the right, in Franchisor's sole discretion and at any time and from time to time, to increase the amount of the Brand Fund Contribution to two percent (2%) of the Gross Revenue generated monthly.
Payments will be made in the same manner and time as the Royalty Fees.
If Franchisee fails to timely report Gross Revenue, then, in addition to a late fee and interest pursuant to Sections 6.2 and 6.3 hereof, Franchisor shall collect one hundred twenty percent (120%) of the last Brand Fund Contribution payable.
Franchisor shall reconcile amounts when Gross Revenues are reported.
- 13.3.2.
Franchisor shall direct the Brand Fund and shall have sole discretion to approve or disapprove the creative concepts, materials and media used in such programs and the placement and allocation thereof.
Franchisee agrees and acknowledges that the Brand Fund is intended to maximize general public recognition and acceptance of the Marks and enhance the collective success of all Franchised Businesses operating under the System.
- 13.3.3.
Franchisor may, but has no obligation to, contribute to the Brand Fund on the same basis as Franchisee with respect to Crawlspace Medic outlets operated by Franchisor or Franchisor's affiliates.
- 13.3.4.
Franchisor may use the Brand Fund to satisfy any and all costs of developing, preparing, producing, directing, administering, conducting, maintaining and disseminating advertising, marketing, promotional and public relations materials, programs, campaigns, sales and marketing seminars and training programs of every kind and nature, through media now existing or hereafter developed (including, without limitation, the cost of television, radio, magazine, social media, newspaper and electronic advertising campaigns; direct mail and outdoor billboard advertising; public relations activities; conducting marketing research, employing advertising agencies to assist therein; developing, enhancing and maintaining the Website; and personnel and other departmental costs for advertising that Franchisor internally administers or prepares).
- 13.3.5.
The Brand Fund will not be used to defray any of Franchisor's general operating expenses, except for reasonable administrative costs and overhead that Franchisor may incur in activities related to the administration
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to the 2024 Crawlspace Medic Franchise Disclosure Document, a franchisee agrees to contribute to the Brand Fund, which is intended to maximize public recognition of the Crawlspace Medic brand and enhance the collective success of all franchised businesses. The franchisor reserves the right to increase the Brand Fund contribution to 2% of monthly Gross Revenue. Payments to the Brand Fund are made in the same manner and at the same time as royalty fees.
If a Crawlspace Medic franchisee fails to report Gross Revenue on time, the franchisor will collect 120% of the last Brand Fund contribution payable, in addition to late fees and interest. The franchisor will reconcile amounts when Gross Revenues are reported. The franchisor has sole discretion over the Brand Fund, including approving creative concepts, materials, and media used in programs, as well as their placement and allocation.
The franchisor may contribute to the Brand Fund on the same basis as the franchisee for Crawlspace Medic outlets operated by the franchisor or its affiliates, but is not obligated to do so. The Brand Fund can be used for various advertising, marketing, promotional, and public relations activities, including television, radio, magazine, social media, newspaper, and electronic advertising campaigns, direct mail, outdoor billboard advertising, public relations activities, marketing research, advertising agencies, website development, and personnel costs for advertising administered internally.
The Brand Fund will not be used for the franchisor's general operating expenses, except for reasonable administrative costs and overhead related to the fund's administration. This arrangement is typical in franchising, where a brand fund is used to promote the brand and support the network, but franchisees should be aware of the franchisor's control over the fund and its potential uses.