How are expenses incurred to provide advertising services presented by Crepe De Licious?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
- Advertising Fees The Company maintains and administers an advertising fund (the "Advertising Fund"). The advertising contributions may be commingled in the general funds, but administratively segregated to form the Advertising Fund. All franchisees must contribute to the fund at the same rate of 3 percent of their respective gross revenues. The Advertising Fund may be used by the Company, in its sole discretion, to meet any and all costs of advertising for the franchise's concept as a whole. The Company has determined the advertising services provided to franchisees are highly interrelated with the franchise right and therefore not distinct. As a result, revenues for advertising services are recognized when the related revenue occurs. Revenues for these services are typically billed in the first week of the month and paid within thirty days. These revenues are presented as franchise contributions for advertising and other services. Expenses incurred to provide these services are presented as Franchise advertising expense and other services.
Source: Item 23 — RECEIPTS (FDD pages 57–233)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, the expenses incurred to provide advertising services are presented as 'Franchise advertising expense and other services.' Crepe De Licious maintains and administers an advertising fund where all franchisees must contribute 3 percent of their gross revenues. This fund is used at the company's discretion to cover advertising costs for the franchise concept as a whole.
The FDD specifies that revenues for advertising services are billed in the first week of the month and are due within thirty days. These revenues are classified as franchise contributions for advertising and other services. This means that the advertising fund is supported by franchisee contributions, which are then used to cover advertising expenses.
For a prospective franchisee, this means that 3% of their gross revenue will go towards the advertising fund, which Crepe De Licious will use to cover advertising expenses. Franchisees should note that the company has sole discretion over how the advertising fund is used. Franchisees should inquire about the specific advertising strategies and how the fund has been used in the past to ensure it aligns with their expectations.