Can Endless Summer Sweets accumulate funds in the Marketing Fund?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
- (e) Surplus or Deficit.
Franchisor may accumulate funds in the Marketing Fund and carry the balance over to subsequent years.
If the Marketing Fund operates at a deficit or requires additional funds at any time, Franchisor may loan such funds to the Marketing Fund on reasonable terms.
- (f) Financial Statement.
Franchisor will prepare an unaudited annual financial statement of the Marketing Fund within 120 days of the close Franchisor's fiscal year and will provide the financial statement to Franchisee upon request.
Source: Item 23 — RECEIPTS (FDD pages 39–125)
What This Means (2024 FDD)
According to Endless Summer Sweets' 2024 Franchise Disclosure Document, Endless Summer Sweets may accumulate funds in its Marketing Fund. The FDD states that the franchisor can carry over any balance in the Marketing Fund to subsequent years. This means that if the Marketing Fund has a surplus at the end of a fiscal year, those funds can be reserved for use in future marketing activities.
Additionally, if the Marketing Fund operates at a deficit or requires additional funds, Endless Summer Sweets has the option to loan funds to the Marketing Fund. This ensures that marketing activities can continue even if there is a temporary shortfall in contributions. The terms of any such loan would be considered reasonable.
Endless Summer Sweets will provide an unaudited annual financial statement of the Marketing Fund to franchisees upon request. This statement will be available within 120 days of the close of the franchisor's fiscal year, allowing franchisees to review the fund's financial status and how the marketing funds are being managed.