Who establishes the Marketing Fund for Endless Summer Sweets?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
The Marketing Fund will be spent at Franchisor's sole discretion, and Franchisor is not a fiduciary with respect to the Marketing Fund.
- 9.4 Market Cooperatives. Franchisor may establish market advertising and promotional cooperative funds ("Market Cooperative") in any geographical areas.
If a Market Cooperative for the geographic area encompassing the Location has been established at the time Franchisee commences operations hereunder, Franchisee shall immediately become a member of such Market Cooperative.
Each Market Cooperative will be organized and governed in a form and manner and shall commence operations on a date determined by Franchisor.
Franchisor may require the Market Cooperative to adopt bylaws or regulations prepared by Franchisor.
Unless otherwise specified by Franchisor, the activities carried on by each Market Cooperative shall be decided by a majority vote of its members.
Franchisor will be entitled to attend and participate in any meeting of a Market Cooperative.
Source: Item 23 — RECEIPTS (FDD pages 39–125)
What This Means (2024 FDD)
According to Endless Summer Sweets' 2024 Franchise Disclosure Document, the franchisor, Endless Summer Sweets Franchising, Inc., has the authority to establish both the Marketing Fund and any market advertising and promotional cooperative funds (Market Cooperative). The franchisor determines the form, manner, and start date of each Market Cooperative.
Endless Summer Sweets has complete discretion over how the Marketing Fund is spent and is not considered a fiduciary regarding the fund. This means that Endless Summer Sweets is not legally bound to act in the franchisees' best interests when managing the fund.
For prospective Endless Summer Sweets franchisees, this means that Endless Summer Sweets has significant control over marketing strategies and expenditures. While franchisees may participate in Market Cooperatives and vote on activities, the franchisor retains the power to establish and govern these cooperatives. Franchisees are required to join a Market Cooperative if one exists for their area, giving them some regional influence, but the franchisor's overall control of the Marketing Fund remains.