Can Endless Summer Sweets use the Marketing Fund for e-commerce programs?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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.
The foregoing includes such activities and expenses as Franchisor reasonably determines, and may include, without limitation: development and placement of advertising and promotions; sponsorships; contests and sweepstakes; development of décor, trade dress, Marks, and/or branding; development and maintenance of brand websites; social media; internet activities; e-commerce programs; search engine optimization; market research; public relations, media or agency costs; trade shows and other events; printing and mailing; and administrative and overhead expenses related to the Marketing Fund (including the compensation of Franchisor's employees working on marketing and for accounting, bookkeeping, reporting, legal and other expenses related to the Marketing Fund).
- (c) Discretion.
Franchisee agrees that expenditures from the Marketing Fund need not be proportionate to contributions made by Franchisee or provide any direct or indirect benefit to Franchisee.
The Marketing Fund will be spent at Franchisor's sole discretion, and Franchisor is not a fiduciary with respect to the Marketing Fund.
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 e-commerce programs. Endless Summer Sweets may establish a Marketing Fund to promote the System on various levels, including local, regional, national, and international. The funds are to be kept in separate bank accounts from Endless Summer Sweets' other accounts.
The FDD specifies that the Marketing Fund can be used for marketing, advertising, and public relations materials, programs, and campaigns. These activities and expenses are determined reasonably by Endless Summer Sweets and can include the development and maintenance of brand websites, social media, internet activities, e-commerce programs, and search engine optimization.
Endless Summer Sweets has complete discretion over how the Marketing Fund is spent, and these expenditures do not need to be proportionate to a franchisee's contributions or provide any direct benefit to the franchisee. While franchisees contribute to the Marketing Fund, Endless Summer Sweets ultimately decides how the funds are allocated and used, including for e-commerce programs.