What is the Brand Development Fund for Dryer Vent Squad?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
(10) Franchisor, in Franchisor's Reasonable Business Judgment, may establish a council to provide guidance respecting the administration of the Brand Development Fund and marketing matters concerning the Brand Development Fund. The council shall only serve in an advisory capacity and Franchisor shall select members of the council which may be comprised of
Source: Item 23 — RECEIPTS (FDD pages 51–207)
What This Means (2024 FDD)
According to Dryer Vent Squad's 2024 Franchise Disclosure Document, franchisees are required to contribute to a Brand Development Fund. While the FDD outlines various aspects of this fund, it does not explicitly state the percentage or fixed amount franchisees must contribute. The document details how the fund is managed, including that the funds are not required to be segregated from the franchisor's other assets, and that the franchisor may borrow from lenders to cover deficits or invest any surplus.
The Brand Development Fund can be used to promote or benefit any type of Dryer Vent Squad business, even those in a particular region of the United States. The franchisee's obligation to contribute to the fund is not reduced even if they do not directly benefit from its activities or if other franchisees fail to contribute. The franchisor may also establish a council to provide guidance on the fund's administration and marketing matters.
Dryer Vent Squad franchisees are required to participate in all advertising, marketing, promotions, research, and public relations programs instituted by the Brand Development Fund. Notably, Dryer Vent Squad businesses owned by the franchisor or its affiliates are not required to pay into the Brand Development Fund. The FDD specifies that the Brand Development Fund is not a trust, and the franchisor is not a trustee or fiduciary of the fund, allowing the franchisor to deposit and maintain the funds in its general accounts.
While the FDD does not specify the exact contribution amount to the Brand Development Fund, it does state that franchisees must spend a minimum amount on local marketing, which is the greater of 2% of monthly Gross Sales, or $1,500 per month for a Single Territory, or $3,000 per month for a Double Territory. A prospective franchisee should clarify with the franchisor the specific contribution percentage or amount required for the Brand Development Fund to fully understand this ongoing expense.