Can a Crawlspace Medic franchisee include salaries for attending advertising meetings 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 Crawlspace Medic's 2024 Franchise Disclosure Document, franchisees are generally prohibited from including salaries and expenses of personnel attending advertising meetings in their local advertising expenditures. Crawlspace Medic requires franchisees to spend a minimum of $5,000 per quarter on local advertising, and the franchisor must approve all advertising materials.
However, there is an exception to this rule. If a Crawlspace Medic franchisee obtains advance written approval from the franchisor, they may be able to include these salary and expense costs in their local advertising expenditure reports. This approval must be secured before including such costs.
This policy ensures that local advertising funds are used in ways that Crawlspace Medic deems most effective for brand promotion. By requiring pre-approval, the franchisor maintains control over how these funds are allocated and can prevent franchisees from using them for activities that do not directly contribute to advertising efforts. Franchisees should carefully document all local advertising expenditures and seek written approval for any costs that might fall outside the standard guidelines to avoid potential issues with compliance.