Is Creative World School required to establish a Marketing Fund?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
We may establish, maintain and administer a system-wide advertising fund (the "Marketing Fund"). (Franchise Agreement ‒ Section 12.1)
We have not established the Marketing Fund so no fund were received or spent in the 2024 fiscal year.
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)
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)
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 FDD, Creative World School is not required to establish a Marketing Fund. Item 11 states that Creative World School "may establish, maintain and administer a system-wide advertising fund (the "Marketing Fund")". However, as of the FDD's publication, "We have not established the Marketing Fund so no fund were received or spent in the 2024 fiscal year."
If Creative World School does establish a Marketing Fund, franchisees' contributions will not exceed 1% of Gross Revenues per week. Creative World School will not assess contributions until 50 schools are open. Creative World School retains the right to defer or reduce contributions for a franchisee, or to reduce or suspend contributions to and operations of the Marketing Fund, with 30 days' prior written notice. If the Marketing Fund is terminated, unspent monies will be distributed to franchisees in proportion to their contributions during the preceding 12-month period.
Even if a Marketing Fund is not established, franchisees must allocate 0.5% of their Gross Revenues quarterly for local advertising and promotion of their school, with initial grand opening advertising expenditures of $7,000 to $15,000. Creative World School may review franchisees' books and records related to these expenditures. If a franchisee has not spent the required amount on local advertising, Creative World School may require them to pay the unexpended amounts into the Marketing Fund, if one is established.