Is the Deck Medic National Advertising Fund considered a trust?

According to Deck Medic's 2024 Franchise Disclosure Document, the National Advertising Fund is explicitly not considered a trust. The agreement between the franchisee and Deck Medic states that Deck Medic is not a trustee or fiduciary of the National Advertising Fund. Furthermore, Deck Medic is allowed to deposit and maintain the funds from the National Advertising Fund in its general accounts, and these funds do not need to be segregated from Deck Medic's other assets.

This arrangement gives Deck Medic significant flexibility in managing the National Advertising Fund. Unlike a trust, where funds must be managed solely for the benefit of the beneficiaries (in this case, the franchisees), Deck Medic has more discretion in how the advertising funds are used. This is a common practice in franchising, where advertising funds are often controlled by the franchisor to ensure consistent branding and marketing efforts across the entire system.

However, this also means that franchisees have less direct control over how their contributions to the National Advertising Fund are spent. While Deck Medic may establish a council to provide guidance on the fund's administration, the franchisor ultimately makes the final decisions. Franchisees should be aware that they may not see a direct or proportionate benefit from their contributions in their specific geographic area, as Deck Medic can use the funds to promote any type of Deck Medic business or region within the United States. Franchisees are still obligated to contribute to the fund, regardless of whether they perceive a direct benefit.

Prospective franchisees should carefully consider these terms and understand that their contributions to the National Advertising Fund are not held in a trust for their exclusive benefit. They should inquire about Deck Medic's specific plans for the fund and how it intends to allocate resources to support franchisees' marketing efforts.