Can a Crawlspace Medic franchisee include incentive programs for employees in their local advertising expenditures?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
encies, the standards and specifications established by Franchisor, as modified from time to time, shall be final and binding upon Franchisee.
13.2. Local Advertising.
- 13.2.1. In addition to the expenditures set forth in Section 13.2.3 below, Franchisee shallspend a minimum of five thousand dollars ($5,000) per quarter on local advertising and we must approve all advertising materials. Franchisor reserves the right to collect some or all of Franchisee's Local Advertising expenditure and implement Local Advertising on Franchisee's behalf.
- 13.2.2. Within ten (10) business days of Franchisor's request, Franchisee shall provide a quarterly expenditure report accurately reflecting Franchisee's Local Advertising expenditures for the preceding quarterly period. The following costs and expenditures incurred by Franchisee shall not be included in Franchisee's expenditures on Local Advertising for purposes of this Section, unless approved in advance by Franchisor in writing: (i) incentive programs for employees or agents of Franchisee; (ii) research expenditures; (iii) salaries and expenses
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, franchisees are generally required to spend a minimum of $5,000 per quarter on local advertising. However, not all costs can be included towards meeting this minimum.
Specifically, the FDD states that incentive programs for employees or agents of the franchisee cannot be included in the local advertising expenditure calculation unless the franchisor approves it in writing beforehand. Other costs that are excluded unless approved in advance include research expenditures, salaries and expenses for personnel attending advertising meetings, and charitable or political contributions.
This means that a Crawlspace Medic franchisee needs to be strategic about how they allocate their local advertising budget, ensuring that they meet the $5,000 minimum with eligible expenses. If a franchisee wishes to implement an employee incentive program as part of their local advertising efforts, they must first obtain written approval from Crawlspace Medic to count those expenses toward their required minimum spending.