Can the Deck Medic National Advertising Fund borrow money to cover deficits?

According to Deck Medic's 2024 Franchise Disclosure Document, the National Advertising Fund is permitted to borrow money to cover deficits. Specifically, the fund may borrow from Deck Medic or other lenders at standard commercial interest rates. This provides Deck Medic with flexibility in managing the advertising fund and ensuring that marketing efforts can continue even if current fee collections are insufficient.

This arrangement means that Deck Medic franchisees could indirectly bear the cost of these borrowings through the National Advertising Fund. Interest expenses on borrowed funds will be paid from the fund's assets, potentially reducing the amount available for actual advertising and marketing activities. The FDD also states that all interest earned on monies contributed to the National Advertising Fund will be used to pay costs of the National Advertising Fund before other assets of the National Advertising Fund are expended.

It is also important to note that Deck Medic is not required to segregate National Advertising Fund Fees from its other assets or accounts. This commingling of funds is not uncommon in franchising, but franchisees should be aware that their advertising contributions are not necessarily held in a separate, dedicated account. Franchisees are entitled to a summary statement of monies collected and costs incurred by the National Advertising Fund for Deck Medic's preceding fiscal year upon written request, allowing them to monitor the fund's financial activity.