What is the 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 Creative World School's 2025 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. The franchisor will direct all programs financed by the Marketing Fund, determining the creative concepts, materials, endorsements, geographic placement, market, and media allocation of the programs. The franchisor is not obligated to ensure that the expenditures in any geographic area are proportionate or equivalent to the contributions from schools in that area, nor is there an obligation to ensure that any school will benefit directly or in proportion to its contribution. The franchisor assumes no direct or indirect liability or obligation regarding the Marketing Fund.
The Marketing Fund may be used to cover the costs of preparing and producing advertising materials, administering regional and multi-regional advertising programs, purchasing direct mail and other media advertising, employing advertising agencies, and supporting public relations, market research, and other marketing activities. Franchisees will periodically receive samples of advertising, marketing, and promotional materials at the Marketing Fund's cost, with multiple copies available at the franchisor's direct production cost plus shipping, handling, and storage charges.
The franchisor will account for the Marketing Fund separately from its other funds and may use a reasonable portion of the fund for salaries, administrative costs, travel expenses, and overhead related to administering the fund and its programs. This includes conducting market research, preparing advertising materials, and collecting contributions. The franchisor may spend more or less than the aggregate contributions in any fiscal year and may borrow or invest surpluses. All interest earned on the Marketing Fund will be used to pay advertising costs before other assets are expended. The franchisor will prepare an annual statement of monies collected and costs incurred by the Marketing Fund, available to franchisees 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. The franchisor has the right to incorporate the Marketing Fund or operate it through a separate entity.