How does Crisp & Green account for payments made for the National Marketing Fee?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
You will be required to pay us a National Marketing Fee, on a monthly basis, in an amount based on a percentage of your Gross Sales for the prior month. The National Marketing Fee is currently an amount equal to 2% of your Gross Sales for the preceding month, although we have the right to increase the National Marketing Fee to an amount up to 3% of your Gross Sales for the preceding month. Our Corporate Restaurants also currently pay the National Marketing Fee on the same basis as franchised Restaurants. This is a fee that you pay to us in consideration of marketing and promotional efforts that we undertake which benefit all Restaurants. This fee is not a contribution to an independent advertising fund or a pooled advertising program. Payments are accounted for as general operating revenue, and we do not provide a separate accounting for how this revenue is spent. Amounts paid to us in the form of the National Marketing Fee may be used by us to pay our expenses relating to marketing and promotion, including, without limitation, expenses arising from:
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 33–44)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, the National Marketing Fee is treated as general operating revenue. Crisp & Green does not provide a separate accounting of how the National Marketing Fee revenue is spent.
Franchisees are required to pay a National Marketing Fee on a monthly basis, which is calculated as a percentage of the Gross Sales from the previous month. Currently, this fee is 2% of Gross Sales, but Crisp & Green retains the right to increase it up to 3%. This fee is paid in exchange for marketing and promotional activities that benefit all Crisp & Green restaurants. Corporate restaurants also pay this fee on the same basis as franchised restaurants.
This arrangement differs from a contribution to an independent advertising fund or a pooled advertising program, where franchisees might have more transparency or control over the funds. Crisp & Green retains sole control over the creative concepts, materials, and placement of advertising, and is not obligated to ensure marketing expenditures are proportionate across different geographic areas. This means a franchisee may not see direct marketing benefits in their specific location despite contributing to the National Marketing Fee.