What is the intended purpose of the Creative World School Marketing Fund?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
ate, and the successor entity will have all of the rights and duties described in the Franchise Agreement. (Franchise Agreement – Section 12.3)
If established, the Marketing Fund will be intended to maximize recognition of the Marks and patronage of Schools. Although we will endeavor to utilize the Marketing Fund to develop advertising and marketing materials and programs and to place advertising that will benefit all Schools, we undertake no obligation to ensure that expenditures by the Marketing Fund in or affecting any geographic area are proportionate or equivalent to the contributions to the Marketing Fund by Schools operating in that geographic area or that any School will benefit directly or in proportion to its contribution to the Marketing Fund from the development of advertising and marketing materials or the placement of advertising. We assume no other direct or indirect liability or obligation to you with respect to collecting amounts due to, or maintaining, directing or administering, the Marketing Fund. (Franchise Agreement – Section 12.4)
Franchisee contributions to the Marketing Fund, if established, will not be more than 1% of Gross Revenues per week. If established, contributions to the Marketing Fund will generally be on a uniform basis, but we reserve the right to defer or reduce contributions of a 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 franchisees in proportion to their respective contributions to the Marketing Fund during the preceding 12-month period. We and our affiliates may contribute to the Marketing Fund on a different basis than franchise owners until circumstances warrant otherwise because our affiliates' operations are currently more or less substantial than franchise operations. (Franchise Agreement – Section 12.1)
We have not established the Marketing Fund so no fund were received or spent in the 2024 fiscal year.
Local Advertising
In addition to the grand opening advertising expenditures of $7,000 to $15,000, you must allocate 0.5% of your Gross Revenues quarterly for advertising and promotion of the School. We may review your books and records relating to your expenditures for such advertising and promotion. If we determine that you have not spent the requisite amounts, we may require you to pay the unexpended amounts into the Marketing Fund, if one is established. (Franchise Agreement – Section 12.5)
All advertising, promotion and marketing must be completely clear and factual and not misleading and conform to the highest standards of ethical marketing and the promotion policies which we prescribe from time to time. Samples of all advertising, promotional and marketing materials that we have not prepared or previously approved must be submitted for approval before you use them. If you do not receive written disapproval within 30 days after we receive the materials, we will be deemed to have given the required approval. You may not use any advertising or promotional materials that we have disapproved. (Franchise Agreement – Section 12.5)
There currently are no franchisee advertising councils or advertising cooperatives that advise us on advertising policies. If a local advertising cooperative is established, you must contribute the amount required by such advertising cooperative, but not more than 1% of your Gross Revenues. (Franchise Agreement – Section 12.5)
Websites
We may restrict, limit, control or designate nearly every aspect of your use of websites, the internet, intranets, worldwide web home pages, social media sites, or e-mail, and require you to participate in a centralized website. You must adhere to any social media policies that we establish from time to time, and must require your employees to do so as well.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 29–47)
What This Means (2025 FDD)
According to the 2025 Creative World School Franchise Disclosure Document, the Marketing Fund, if established, is intended to maximize recognition of the Creative World School marks and increase patronage of the schools. Creative World School will endeavor to use the Marketing Fund to develop advertising and marketing materials and programs, and to place advertising that will benefit all schools. However, Creative World School does not guarantee that expenditures will be proportionate to contributions from schools in any specific geographic area, nor that any school will directly benefit in proportion to its contribution. The contribution to the Marketing Fund will not exceed 1% of weekly Gross Revenues. Creative World School will not assess contributions to the Marketing Fund until 50 schools are open.
The Marketing Fund may be used to cover the costs of preparing and producing video, audio, and written advertising materials. It can also be used for administering regional and multi-regional advertising programs, including purchasing direct mail and other media advertising, and employing advertising, promotion, and marketing agencies. Additionally, the fund can support public relations, market research, and other advertising, promotion, and marketing activities. Creative World School will periodically provide franchisees with samples of advertising, marketing, and promotional materials at the fund's cost, with multiple copies available at the direct cost of production plus shipping, handling, and storage charges.
The Marketing Fund will be accounted for separately from Creative World School's other funds and will not be used to cover general operating expenses. An exception is made for reasonable salaries, administrative costs, travel expenses, and overhead incurred in administering the Marketing Fund and its programs. These activities include conducting market research, preparing advertising, promotion, and marketing materials, and collecting and accounting for contributions to the fund. Creative World School retains the right to spend more or less than the aggregate contribution of all schools in any fiscal year and may borrow or invest surpluses for future use. Interest earned on the Marketing Fund will be used to pay advertising costs before other assets are used. Creative World School will provide an annual statement of monies collected and costs incurred by the Marketing Fund upon written request, but is not required to have the fund audited. Monies from the Marketing Fund will not be used for franchise sales solicitation materials.