What is the definition of 'Marketing Fund' for Creative World School?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
Recognizing the value of advertising and marketing to the goodwill and public image of Schools, we may establish a system-wide marketing fund (the "Marketing Fund") for such advertising, marketing and public relations programs and materials we deem necessary or appropriate.
You agree to contribute to the Marketing Fund such amounts that we prescribe from time to time (the "Marketing Contributions"), not more than 1% of your Gross Revenues per week (except as described below), payable in the same manner as the Royalty.
We reserve the right to defer or reduce contributions of a School franchisee and, upon 30 days' prior written notice to you, to reduce or suspend contributions to and operations of the Marketing Fund for one or more periods of any length and to terminate (and, if terminated, to reinstate) the Marketing Fund.
If the Marketing Fund is terminated, all unspent monies on the date of termination will be distributed to our franchisees in proportion to their respective contributions to the Marketing Fund during the preceding 12-month period.
We or our affiliates may contribute to the Marketing Fund on a different basis than other franchise owners until circumstances warrant otherwise because our affiliates' operations are currently more or less substantial than franchise operations.
We will not assess Marketing Contributions until at least 50 Schools are open and operating.
- 12.02 Use of the Marketing Fund.
If we establish the Marketing Fund, we will direct all programs financed by the Marketing Fund, may determine the creative concepts, materials and endorsements, and the geographic, market and media placement and allocation.
You agree that the Marketing Fund may be used to pay the costs of preparing and producing video, audio and written advertising materials; administering regional and multi-regional advertising programs, including, without limitation, purchasing direct mail and other media advertising and employing advertising, promotion and marketing agencies; and supporting public relations, market research and other advertising, promotion and marketing activities.
The Marketing Fund periodically will furnish you with samples of advertising, marketing and promotional formats and materials at no cost.
Multiple copies of such materials will be furnished to you at our direct cost of producing them, plus any related shipping, handling and storage charges.
- 12.03 Accounting for the Marketing Fund.
The Marketing Fund, if any, will be accounted for separately from our other funds and will not be used to defray any of our general operating expenses, except for such reasonable salaries, administrative costs, travel expenses and overhead as we may incur in activities related to the administration of the Marketing Fund and its programs, including, without limitation, conducting market surveys, preparing advertising, promotion and marketing materials and collecting and accounting for contributions to the Marketing Fund.
We may spend, on behalf of the Marketing Fund, in any fiscal year an amount greater or less than the aggregate contribution of all Schools to the Marketing Fund in that year, and the Marketing Fund may borrow from us or others to cover deficits or invest any surplus for future use.
All interest earned on monies contributed to the Marketing Fund will be used to pay advertising costs before other assets of the Marketing Fund are expended.
We will prepare a periodic statement of monies collected and costs incurred by the Marketing Fund and furnish the statement to you upon written request.
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
According to the 2025 Creative World School Franchise Disclosure Document, the Marketing Fund is a system-wide fund that Creative World School may establish for advertising, marketing, and public relations programs and materials they deem necessary or appropriate. The purpose of the Marketing Fund is to enhance the goodwill and public image of Creative World School locations.
Franchisees contribute to the Marketing Fund through Marketing Contributions, which cannot exceed 1% of their Gross Revenues per week, payable in the same manner as the Royalty. However, Creative World School reserves the right to defer or reduce contributions from a franchisee, or even suspend or terminate the Marketing Fund with 30 days' prior written notice. If the Marketing Fund is terminated, any unspent monies will be distributed to franchisees based on their contributions over the preceding 12-month period.
Creative World School will direct all programs financed by the Marketing Fund, including determining creative concepts, materials, endorsements, and the placement and allocation of advertising. The fund may cover costs related to preparing advertising materials, administering advertising programs, employing agencies, and supporting public relations and market research. Franchisees will receive samples of advertising materials at no cost, with multiple copies available at the direct cost of production plus related charges.
The Marketing Fund will be accounted for separately from Creative World School's other funds and will not be used for general operating expenses, except for reasonable salaries and administrative costs related to the fund's administration. Interest earned on the Marketing Fund will be used to pay advertising costs. Creative World School will provide periodic statements of monies collected and costs incurred by the fund upon written request from franchisees. Marketing Contributions will not be assessed until at least 50 Creative World School locations are open and operating.