Can the Deck Medic National Advertising Fund invest surplus funds?

According to Deck Medic's 2024 Franchise Disclosure Document, the National Advertising Fund is not required to expend its fees in the year they are collected. Deck Medic may borrow from the franchisor or other lenders at standard commercial interest rates to cover deficits. Furthermore, Deck Medic may cause the National Advertising Fund to invest any surplus for future use by the National Advertising Fund. Any interest earned on these investments will be used to cover the costs of the National Advertising Fund before other assets are used.

This means that Deck Medic retains the flexibility to manage the National Advertising Fund's finances strategically. It is not obligated to spend all collected fees immediately and can save surplus funds for future campaigns or unexpected expenses. The ability to borrow funds provides a safety net, while investing surpluses can generate additional income to offset advertising costs.

For a prospective franchisee, this indicates that the National Advertising Fund is managed with a long-term perspective. The ability to invest surplus funds and use the interest earned to cover costs could potentially reduce the financial burden on franchisees in the future. However, franchisees should be aware that Deck Medic has broad discretion over these funds, and the benefits of any investment may not be immediately apparent or directly proportional to their contributions.

It is also important to note that the FDD states that the National Advertising Fund is not a trust and Deck Medic is not a trustee or fiduciary. This means that Deck Medic has considerable latitude in how the fund is managed, although they are expected to act in a reasonable business judgment. Franchisees should carefully consider these factors and seek clarification from Deck Medic regarding the fund's investment strategy and historical performance.