Who establishes the Brand Marketing Fee for Ella Cafe franchises?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
"Brand Marketing Fee" means the fee established (or which may be established) by ELLA Coffee Franchise into which Brand Marketing Fee Contributions are deposited.
9.4 Brand Marketing Fee. Franchisor has established and administers a System-wide marketing, advertising and promotionsto facilitate regional and national advertising and marketing efforts to which Franchisee shall contribute a monthly fee.
On or before 5:00 PM EST on Tuesday each week (unless this day is a weekend or holiday, then on the business day before), Franchisee shall contribute to the Brand Marketing Fee an amount specified by Franchisor from time to time, but not to exceed 3% of Gross Sales for the applicable period ("Brand Marketing Fee").
The Brand Marketing Fee shall be due at the same time as the Royalty Fee.
Brand Marketing Fee shall be made at the time and in the manner provided for Royalty Fees in Section 4.
Franchisor shall notify Franchisee at least thirty (30) days before changing Brand Marketing Fee requirements.
The Brand Marketing Fee shall be maintained and administered by Franchisor or its designee as follows:
- 9.4.1.
Franchisor shall oversee all marketing programs, with sole control over creative concepts, materials and media used in such programs, and the placement and allocation thereof.
Franchisor does not warrant that any particular franchisee will benefit directly or pro rata from expenditures by the Brand Marketing Fee.
The program(s) may be local, regional or System-wide.
Franchisor does not warrant the success or effectiveness of any particular marketing program.
- 9.4.2.
Franchisee's Brand Marketing Fee may be used to meet the costs of, or to reimburse Franchisor for its costs of, any cost of conducting market research, producing, maintaining, administering and directing consumer advertising (including, without limitation, the cost of preparing and conducting television, radio, Internet, intranet, magazine, newspaper, and direct mail advertising campaigns and other public relations activities; developing and/or hosting an Internet and/or intranet web page or site and similar activities; employing advertising agencies to assist therein; and providing promotional brochures and other marketing materials to franchisees).
Brand Marketing Fee shall not be used for creating or placing any advertisement that is principally a solicitation for new franchisees, but may include in all advertising prepared using Brand Marketing Fee monies (including Internet advertising) information concerning franchise opportunities, and a portion of Brand Marketing Fee monies may be used to create and maintain one or more pages on Franchisor's web site devoted to advertising franchise opportunities and identifying and screening inquiries and applications submitted by franchise candidates.
- 9.4.3.
Franchisee acknowledges that the Brand Marketing Fee (and marketing program) is not a trust, escrow, or a fund, and neither Franchisor nor its affiliates assume no fiduciary obligation for administering or auditing the marketing program or for any other reason.
Franchisor may as it deems necessary prepare an unaudited report of the marketing program each year, and may provide Franchisee a copy upon receipt of Franchisee's written request.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, the Brand Marketing Fee is established by ELLA Coffee Franchise. Franchisees are required to contribute to this fee, which is used for system-wide marketing, advertising, and promotional activities. The Brand Marketing Fee cannot exceed 3% of the franchisee's Gross Sales.
Ella Cafe requires franchisees to contribute to the Brand Marketing Fee weekly, specifically by 5:00 PM EST on Tuesdays (or the business day before if Tuesday falls on a weekend or holiday). The fee is due at the same time as the Royalty Fee. Ella Cafe must notify franchisees at least 30 days before changing the Brand Marketing Fee requirements.
The Brand Marketing Fee is administered by Ella Cafe, which has sole control over the creative concepts, materials, and media used in marketing programs. These programs can be local, regional, or system-wide. While the Brand Marketing Fee is used for various marketing activities, Ella Cafe does not guarantee that any specific franchisee will directly or proportionally benefit from the expenditures.
It's important to note that the Brand Marketing Fee is not a trust, escrow, or fund, and Ella Cafe does not assume any fiduciary obligation for administering or auditing the marketing program. However, Ella Cafe may prepare an unaudited report of the marketing program each year and provide a copy to the franchisee upon written request.