How much advance notice will Endless Summer Sweets provide before establishing an advertising fund?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
Brand Marketing Fund. You are not required at this time to pay us an advertising fee or contribute to an advertising fund that we administer. However, we reserve the right to establish a system-wide advertising and marketing fund. If we establish an advertising and marketing fund (the Fund), we will provide you with thirty (30) days' advance notice of the establishment of the Fund. If we establish this fund, you will contribute one percent (1%) of your Gross Sales each
week to the Fund. All franchisees will contribute to the Fund at the same rate. Any restaurants in which we or our affiliates have an ownership interest, may, but are not obligated to, contribute to the Fund.
The Fund is not a trust or escrow account, and we do not have any fiduciary obligations with respect to the or any advertising fees we receive. We have no obligation to make expenditures on your behalf that are equivalent or proportionate to your contributions to the Fund, to ensure that any particular franchisee benefits directly or pro rata from marketing or advertising we develop or place or to ensure that any advertising directly impacts your business or penetrates your territory.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 18–25)
What This Means (2024 FDD)
According to the 2024 Endless Summer Sweets FDD, franchisees will receive 30 days advance notice before the establishment of a system-wide advertising and marketing fund. Currently, franchisees are not required to pay an advertising fee or contribute to such a fund.
However, Endless Summer Sweets reserves the right to establish this fund in the future. If implemented, franchisees will be required to contribute 1% of their gross sales each week to the fund. All franchisees will contribute at the same rate, though restaurants owned by Endless Summer Sweets or its affiliates may choose whether or not to contribute.
The advertising fund is not a trust or escrow account, and Endless Summer Sweets does not have fiduciary obligations regarding the fund or advertising fees. The franchisor is not obligated to ensure that expenditures benefit franchisees proportionally to their contributions or that advertising directly impacts each franchisee's business or territory. This means that while franchisees must contribute if the fund is established, there is no guarantee of direct or proportional benefit from the fund's activities.