Can a Crawlspace Medic franchisee include research expenditures in their local advertising expenditures?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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 of any of Franchisee's personnel to attend advertising meetings, workshops or other marketing activities; (iv) charitable, political or other contributions or donations.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to the 2024 Crawlspace Medic Franchise Disclosure Document, franchisees are generally prohibited from including research expenditures in their local advertising expenditures, unless they receive prior written approval from Crawlspace Medic.
The FDD specifies that franchisees must spend a minimum of $5,000 per quarter on local advertising, and all advertising materials must be approved by Crawlspace Medic. Franchisees are required to provide a quarterly expenditure report accurately reflecting their local advertising spending.
However, certain costs and expenditures are explicitly excluded from what can be counted towards this $5,000 minimum. These exclusions include incentive programs for employees, salaries and expenses for personnel attending advertising meetings, charitable or political contributions, and, importantly, research expenditures. Therefore, a Crawlspace Medic franchisee cannot typically count research expenditures toward their required local advertising spend unless they obtain advance written permission from the franchisor.