Who manages the Brand Marketing Fee for Ella Cafe?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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).
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 managed by the Franchisor, ELLA Coffee Franchise. The franchisee contributes a monthly fee, up to 3% of Gross Sales, which the franchisor then uses for system-wide marketing, advertising, and promotions. The franchisor has sole control over the creative concepts, materials, and media used in these programs, as well as their placement and allocation.
Ella Cafe does not guarantee that any franchisee will directly benefit from the Brand Marketing Fee expenditures or warrant the success of any marketing program. The marketing programs can be local, regional, or system-wide, and the franchisee's Brand Marketing Fee may cover the costs or reimburse Ella Cafe for market research, consumer advertising, website maintenance, and promotional materials.
This arrangement is typical in franchising, where franchisors control marketing to maintain brand consistency and leverage economies of scale. However, franchisees should be aware that they do not have direct control over how these funds are spent and should evaluate the franchisor's marketing strategies and track record during their due diligence.