Does Crepe De Licious assume a fiduciary duty to franchisees regarding the Advertising Fund?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
We assume no fiduciary duty to you or other direct or indirect liability or obligation to collect amounts due to the Advertising Fund or to maintain, direct, or administer the Advertising Fund. Any unused funds in any calendar year will be applied to the following year's funds, and we reserve the right to contribute or loan additional funds to the Advertising Fund on any terms we deem reasonable.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 29–40)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, Crepe De Licious does not assume a fiduciary duty to franchisees regarding the Advertising Fund. The FDD states that Crepe De Licious has complete discretion on how the Advertising Fund will be utilized and is not obligated to spend any amount on advertising in the geographical area where a franchisee is located.
Crepe De Licious, or one of its affiliates or designees, will administer the Advertising Fund, which will be held in a separate bank, commercial, or savings account. The funds can be used for various marketing and promotional activities, including local, regional, or national advertising, sales promotions, public relations, website development, and technology development. Crepe De Licious may also reimburse itself or its affiliates for administrative costs, audits, accounting, legal expenses, taxes, and other direct or indirect expenses associated with the programs funded by the Advertising Fund.
While Crepe De Licious provides an annual accounting of the Advertising Fund's expenditures upon written request, the fund itself is not audited. For the fiscal year ending December 31, 2024, Crepe De Licious collected $72,857 in Advertising Fund Contributions and spent $72,614.50, allocating the majority (98%) to administrative and payroll expenses. This lack of fiduciary duty and the franchisor's broad discretion in using the Advertising Fund are important considerations for potential franchisees.