What is the required action of an Endless Summer Sweets franchisee regarding advertising and promotional programs established by the franchisor?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
ays will be deemed to be disapproved. You must use your best efforts to promote and advertise your Business and will participate in all advertising and promotional programs we establish in the manner we direct as described in the Operations Manual or otherwise in writing.
Market Introduction Advertising and Marketing. We recommend that you spend a minimum of $2,500 on initial advertising and promotional materials and advertising, promotion, and events to promote and execute the opening of your Endless Summer Sweets restaurant, which must be coordinated with us and must occur not more than 30 days before or 30 days after the first day you open your Business. We must approve all Market introduction advertising. Your minimum expenditure on market introduction advertising is in addition to the local advertising requirements described above.
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.
We may use the Fund to defray expenses incurred in connection with the cost of creating, formulating, developing and implementing marketing, advertising and promotional programs, campaigns and materials, and any other activities we, in our sole judgment, believe are appropriate to enhance, promote and protect the Endless Summer Sweets restaurant brand. These items and activities may include (i) preparing marketing and advertising materials;
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 18–25)
What This Means (2024 FDD)
According to Endless Summer Sweets' 2024 Franchise Disclosure Document, franchisees must actively participate in all advertising and promotional programs that the franchisor establishes. This participation must be in the manner directed by Endless Summer Sweets, as outlined in the Operations Manual or in writing.
Endless Summer Sweets requires franchisees to spend 3% of their gross sales per month on local advertising and promotional activities. These activities must be approved by Endless Summer Sweets and can include advertising, merchandising, and sales promotions. Franchisees must provide an accounting of these expenditures to Endless Summer Sweets by February 28th of each year, including documentation of the activities executed during the previous calendar year. If a franchisee fails to spend the required minimum amount on approved local advertising, they must pay the difference to Endless Summer Sweets.
Endless Summer Sweets also has the power to form advertising cooperatives, and franchisees are required to participate in and contribute to any local or regional advertising cooperative established in their area. While there is currently no advertising fund, Endless Summer Sweets reserves the right to establish one, in which case franchisees would be required to contribute 1% of their gross sales each week. The franchisor retains control over the advertising fund and is not obligated to spend amounts equivalent to a franchisee's contribution in their specific area.