What is the dependency between the Advertising Fund and the Local Advertising Requirement for a Crepe De Licious franchise?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
you to pay the Technology Fee directly to the service provider(s) of these services, in which case the amount will be set by the provider.
5.13 Marketing.
- (a) Marketing Programs. You will participate in all advertising, public relations, promotion, market research, and other marketing activities we may implement for the System ("Marketing Programs").
- (b) Grand Opening Marketing. You must spend at least $2,500 on local advertising, public relations, promotion, and other marketing activities in connection with your grand opening. Such amount shall be spent before your Restaurant or Kiosk opens and during its first 90 days of operation. Your grand opening marketing campaign must be approved by us before it can be conducted. You must submit to us proof of these expenditures within 30 days after your Restaurant or Kiosk first opens for business. The Grand Opening Marketing expenses are not applicable to any Food Truck Franchised Business.
- (c) Local Marketing. In addition to the Advertising Fund Contribution (defined in Section 8.03), you must spend the greater of $500 or one percent (1%) of your monthly Gross Revenues on local advertising each month ("Local Advertising Requirement"). If you fail to spend the Local Advertising Requirement, you will be required to pay the difference to us or, if established, the Advertising Fund. Your marketing materials must use the Marks correctly, comply with System Standards and applicable law, and be expressly approved by us in writing before use. If you use advertising that has not been approved by us, you will be required to pay us $500 per incident, which will be either paid to us or deposited into the Advertising Fund, once established.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, franchisees have both a Local Advertising Requirement and may be required to contribute to the Advertising Fund. The Local Advertising Requirement mandates that franchisees spend the greater of $500 or one percent (1%) of their monthly Gross Revenues on local advertising each month.
If a Crepe De Licious franchisee fails to meet the Local Advertising Requirement, they are obligated to pay the difference to either the franchisor or, if one has been established, to the Advertising Fund. Furthermore, if a franchisee uses advertising materials not expressly approved by Crepe De Licious, they will be required to pay $500 per incident, which will be either paid to the franchisor or deposited into the Advertising Fund, once established.
Crepe De Licious requires franchisees to pay an advertising fee of three percent (3%) of their Gross Revenues, contributing to the Advertising Fund. The franchisor has complete discretion over how the Advertising Fund is utilized and is not obligated to spend any amount on advertising in the geographical area where the franchisee is located. The franchisor may also defer, reduce, suspend, or terminate Advertising Fund contributions with prior written notice. If the Advertising Fund is terminated, unused contributions will be distributed to contributing franchisees and the franchisor in proportion to their contributions during the preceding 24-month period.