Can the Endless Summer Sweets Marketing Fund be used for regional advertising?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
y prescribe. Franchisee shall implement any social media and marketing plans, or campaigns as determined by Franchisor.
- 9.2 Use by Franchisor. Franchisor may use any marketing materials or campaigns developed by or on behalf of Franchisee, and Franchisee hereby grants an unlimited, perpetual, royalty-free license to Franchisor for such purpose.
- 9.3 Marketing Fund. Franchisor may establish a Marketing Fund to promote the System on a local, regional, national, and/or international level. If Franchisor has established a Marketing Fund:
- (a) Separate Account. Franchisor shall hold the Marketing Fund Contributions from all franchisees in one or more bank accounts separate from Franchisor's other accounts.
- (b) Use. Franchisor shall use the Marketing Fund only for marketing, advertising, and public relations materials, programs and campaigns (including at local, regional, national, and/or international level), and related overhead.
Source: Item 23 — RECEIPTS (FDD pages 39–125)
What This Means (2024 FDD)
According to Endless Summer Sweets' 2024 Franchise Disclosure Document, the Marketing Fund can be used for regional advertising. Specifically, Endless Summer Sweets may establish a Marketing Fund to promote the System on a local, regional, national, and/or international level.
The FDD states that the Marketing Fund will be used for marketing, advertising, and public relations materials, programs and campaigns (including at local, regional, national, and/or international level), and related overhead. This gives Endless Summer Sweets broad discretion in how the fund is used, and expenditures do not need to be proportionate to a franchisee's contributions or provide any direct benefit to the franchisee.
In addition to the Marketing Fund, Endless Summer Sweets may establish market advertising and promotional cooperative funds ("Market Cooperative") in any geographical areas. If a Market Cooperative exists for the franchisee's location when they begin operations, they must immediately become a member. If a Market Cooperative is established during the term of the Franchise Agreement, the franchisee must join within thirty days. Endless Summer Sweets will not require a franchisee to be a member of more than one Market Cooperative.