Is Endless Summer Sweets required to establish a Marketing Fund?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
“Marketing Fund” means the fund established (or which may be established) by Franchisor into which Marketing Fund Contributions are deposited.
(d) Contribution by Other Outlets.
Franchisor is not obligated to (i) have all other Endless Summer Sweets businesses (whether owned by other franchisees or by Franchisor or its affiliates) contribute to the Marketing Fund, or (ii) have other Endless Summer Sweets businesses that do contribute to the Marketing Fund contribute the same amount or at the same rate as Franchisee.
- 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.
If a Market Cooperative for the geographic area encompassing the Location is established during the term of this Agreement, Franchisee shall become a member of such Market
Cooperative within thirty (30) days. Franchisor shall not require Franchisee to be a member of more than one Market Cooperative. If Franchisor establishes a Market Cooperative:
- (a) Governance.
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, Endless Summer Sweets is not obligated to have all Endless Summer Sweets businesses contribute to the Marketing Fund. The document states that the franchisor has the option to establish a Marketing Fund, but it is not a requirement. The Marketing Fund is where contributions are deposited.
Endless Summer Sweets also has the option to establish market advertising and promotional cooperative funds, called "Market Cooperative", in any geographical areas. If a Market Cooperative is established for the franchisee's location when they begin operations, the franchisee must immediately become a member. If a Market Cooperative is established during the term of the Franchise Agreement, the franchisee has thirty days to become a member. Endless Summer Sweets will not require a franchisee to be a member of more than one Market Cooperative.
Endless Summer Sweets determines how each Market Cooperative will be organized and governed, as well as when it will begin operations. Endless Summer Sweets may also require the Market Cooperative to adopt bylaws or regulations that they prepare. Unless Endless Summer Sweets specifies otherwise, the activities of each Market Cooperative are decided by a majority vote of its members. Endless Summer Sweets is entitled to attend and participate in any meeting of a Market Cooperative.
For a prospective franchisee, this means that while there may be a Marketing Fund, contributing to it may not be mandatory for all franchisees. However, membership in a local Market Cooperative could be required, giving the franchisee less control over marketing spend in their specific area. It would be prudent for a potential franchisee to discuss the marketing strategy and potential costs with the franchisor to fully understand their obligations.