Will Ella Cafe contribute to the Brand Marketing Fee for company-owned cafes?

According to Ella Cafe's 2024 Franchise Disclosure Document, while not contractually obligated, Ella Cafe anticipates that all of its company-owned cafes or those owned by an affiliate will contribute to the Brand Marketing Fee, similar to the requirement for franchisees. This fee is used for System-wide marketing, advertising, and promotion to assist in regional and national advertising efforts. Franchisees are required to pay a Brand Marketing Fee, which can be up to 3% of Gross Sales, with the current requirement being 2% of Gross Sales.

This contribution from company-owned cafes could potentially benefit franchisees by increasing the overall marketing budget and reach of advertising campaigns. However, the document also states that the Brand Marketing Fee is not maintained separately as an advertising fund or trust, and the contributions are not audited. This means there is less transparency regarding how the funds are managed and spent.

At the end of each calendar year, an Ella Cafe franchisee can request an account of how the Brand Marketing Fee monies were spent during that year, and a copy of such accounting will be provided upon written request. Currently, there is no franchisee advertising council to provide guidance or suggestions regarding advertising and marketing matters. If Ella Cafe's own Coffee Houses are members of a local or regional advertising cooperative, they must contribute to the cooperative on the same basis as franchisees and will vote on the same basis as other members.