Is the Brand Fund contribution for Extreme Art Studio in addition to other advertising requirements?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
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Brand Fund
We have a Brand Fund for marketing, developing and promoting the System, the Marks and Extreme Art Studio Businesses. You must pay one percent (1%) of your Gross Sales for the Brand Fund ("Brand Fund Contribution"). Your contribution to the Brand Fund will be in addition to all other advertising requirements set out in this Item 11. Each franchisee will be required to contribute to the Brand Fund, but certain franchisees may contribute on a different basis, depending on when they signed their Franchise Agreement. Franchisor-owned outlets may, but are not required to, contribute to the Brand Fund on the same basis as franchisees. Extreme Art Studio Businesses will contribute to the same Brand Fund.
We, or our affiliate or designees, will manage the Brand Fund. We may prepare advertising materials ourselves or hire national and/or regional advertising agencies to create them. We have complete discretion on how the Brand Fund will be utilized. We may use the Brand Fund for local, regional, or national marketing, advertising, sales promotion and promotional materials, public and consumer relations, website development and search engine optimization, the development of technology for the System, and any other purpose to promote the Extreme Art brand. We may reimburse ourselves, our authorized representatives, or our affiliates from the Brand Fund for administrative costs, independent audits, reasonable accounting, bookkeeping, reporting and legal expenses, taxes, and all other direct or indirect expenses associated with the programs funded by the Brand Fund. We do not guarantee that advertising expenditures from the Brand Fund will benefit you or any other franchisee directly, on a pro rata basis, or at all. We are not obligated to spend any amount on advertising in the geographical area where you are or will be located. We will not use the Brand Fund Contributions for advertising that is principally a solicitation for the sale of Franchises, but we reserve the right to include a notation in any advertisement indicating "Franchises Available," or similar phrasing, or include information regarding acquiring a Franchise on or as a part of materials and items produced by or for the Brand Fund.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 27–37)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the Brand Fund contribution is in addition to other advertising requirements. Specifically, franchisees must pay one percent (1%) of their gross sales to the Brand Fund.
In addition to the Brand Fund contribution, each Extreme Art Studio Business must spend $500 per month on local advertising to promote their business. If a franchisee fails to meet this local advertising requirement, they must pay the difference to Extreme Art Studio or the Brand Fund.
Furthermore, franchisees may be required to participate in local or regional advertising cooperatives, contributing 0.5% to 1% of gross sales to these cooperatives. However, contributions to these cooperatives will be credited toward the franchisee's local advertising requirement. Franchisees must also spend between $5,000 and $10,000 on a grand opening marketing program for their Extreme Art Studio Business.