Does the Dryer Vent Squad franchisee have any control over how the Brand Development Fund is spent?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
evelopment Fund shall not in any way release Franchisee from or reduce Franchisee's obligations under this Article 9, such obligations being separate and independent obligations of Franchisee under this Agreement. Except as expressly provided in this Article 9, Franchisor assumes no direct or indirect liability, responsibility, or obligation to Franchisee with respect to the maintenance, direction, and/or administration of the Brand Development Fund; and
(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 employees of Franchisor, Franchisor, franchisees of the System and third parties.
9.B. LOCAL MARKETING
On an on-going monthly basis, Franchisee must spend on the local marketing of the Franchised Business not less than the greater of: (a) 2% of Franchisee's monthly Gross Sales; or (b) $1,500 per month if Franchisee's Operating Territory qualifies as a Single Territory, or $3,000 per month if Franchisee's Operating Territory qualifies as a Double Territory.
On or before the 5th day of each calendar year month, or such other dates as specified by Franchisor, Franchisee shall provide Franchisor with an accurate accounting of Franchisee's local marketing expenditures, placements, activities, and metrics for the immediately preceding calendar year month. At the request of Franchisor, Franchisee shall provide Franchisor with on-going access to any and all data and systems that record and/or report information related to Franchisee's local marketing activities and expenditures and to provide Franchisor such other periodic reports and records as may be requested by Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 51–207)
What This Means (2024 FDD)
According to the 2024 Dryer Vent Squad Franchise Disclosure Document, franchisees have limited direct control over the Brand Development Fund. While Dryer Vent Squad may establish a council to provide guidance on the fund's administration and marketing matters, this council serves only in an advisory capacity. The franchisor ultimately selects the council members, who may include employees of Dryer Vent Squad, franchisees, and third parties.
Dryer Vent Squad retains the authority to use the Brand Development Fund to promote or benefit Dryer Vent Squad businesses in specific regions of the United States, and a franchisee's failure to directly benefit from these promotions does not reduce their obligation to contribute to the fund. The franchisor also isn't obligated to ensure that expenditures in any geographic area are proportionate or equivalent to the contributions from Dryer Vent Squad businesses operating in that area.
Franchisees are required to participate in all advertising, marketing, promotions, research, and public relations programs instituted by the Brand Development Fund. Dryer Vent Squad businesses owned by the franchisor or its affiliates are not required to pay into the Brand Development Fund. The Brand Development Fund is not treated as a trust, and Dryer Vent Squad is not considered a trustee or fiduciary of the fund, allowing the franchisor to deposit and maintain the funds in its general accounts. This arrangement gives Dryer Vent Squad significant discretion in managing and allocating the Brand Development Fund.