What could happen to local advertising costs for a Crisp & Green franchise if the standards are not met?

According to the 2024 Crisp & Green Franchise Disclosure Document, a franchisee's required local marketing expenditure will range from 0% to 4.5% of Gross Sales. However, Crisp & Green has a required local marketing expenditure of 4.5% of Gross Sales, but a franchisee has the ability to reduce this requirement by meeting certain standards. If these standards are not met, the franchisee's local advertising costs could be significantly higher than the figures shown in the FDD.

For example, the sole Corporate Restaurant's local advertising costs were $11,932, which was 0.47% of Gross Restaurant Sales of $2,537,832 for the calendar year ended December 31, 2023. If a franchisee fails to meet the standards set by Crisp & Green to reduce the local marketing expenditure, they could be required to spend up to 4.5% of their gross sales on local advertising.

This could significantly impact the profitability of the franchise, as the franchisee would need to allocate a larger portion of their revenue to local advertising. Therefore, it is crucial for prospective franchisees to understand the standards required by Crisp & Green to reduce the local marketing expenditure and to assess their ability to meet those standards. Understanding these requirements is essential for accurately projecting potential advertising costs and overall financial performance.