In what manner should the Ella Cafe Brand Marketing Fee be made?
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 due at the same time as the Royalty Fee. Franchisees must contribute to the Brand Marketing Fee weekly, specifically by 5:00 PM EST on Tuesday, unless that day falls on a weekend or holiday, in which case the payment is due on the business day before. The amount is specified by Ella Cafe, but will not exceed 3% of Gross Sales for the applicable period. Ella Cafe will notify franchisees at least thirty days before changing Brand Marketing Fee requirements.
This means that prospective Ella Cafe franchisees must be prepared to make this payment on a short, weekly schedule. The Brand Marketing Fee facilitates regional and national advertising and marketing efforts. The franchisee agreement stipulates that the Brand Marketing Fee is not a trust, escrow, or fund, and Ella Cafe has no fiduciary duty for administering or auditing the marketing program.
Ella Cafe oversees all marketing programs and has sole control over the creative concepts, materials, and media used. The marketing programs may be local, regional, or system-wide, and Ella Cafe does not warrant that any particular franchisee will benefit directly or pro rata from expenditures by the Brand Marketing Fee, nor does it guarantee the success or effectiveness of any marketing program. The Brand Marketing Fee may cover the costs of market research, consumer advertising, and promotional materials for franchisees.