Can Face Foundrie defer or reduce a franchise owner's marketing contributions?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
We anticipate all of our franchisees will contribute to the Fund, although there is no prohibition against us charging higher or lower rates for future franchisees. We may, at any time, defer or reduce a franchise owner's Marketing Contributions and, upon written notice to you, reduce or suspend Marketing Contributions and operations for one or more periods of any length and terminate (and, if terminated, reinstate) the Fund. If we terminate the Fund, we will either spend all monies in the Fund for advertising or promotional purposes, or distribute all unspent monies to franchise owners, and to us and our affiliates, in proportion to their, and our, respective contributions during the preceding twelve-month period.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 33–43)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, Face Foundrie has the right to defer or reduce a franchise owner's marketing contributions. Face Foundrie may also reduce or suspend marketing contributions for one or more periods of any length, and even terminate (and reinstate) the marketing fund with written notice.
This means that Face Foundrie franchisees may see fluctuations in their required marketing contributions. While the standard contribution is 3% of gross sales, Face Foundrie retains the flexibility to adjust this amount. This could be beneficial in certain circumstances, such as a new franchisee needing some financial relief or during times of economic hardship. However, it also means that franchisees cannot rely on a fixed marketing contribution rate, and it could potentially increase.
If Face Foundrie terminates the marketing fund, it must spend all the money in the fund for advertising or promotional purposes, or distribute any unspent funds to the franchisees, Face Foundrie, and its affiliates. The distribution will be proportional to their respective contributions during the 12 months prior to termination. This provides some assurance that the funds will be used for their intended purpose, even if the fund is discontinued.
It is important for prospective franchisees to understand that Face Foundrie has significant control over the marketing fund and its contributions. While this allows Face Foundrie to adapt to changing market conditions and franchisee needs, it also means that franchisees have limited input into how the fund is managed. Franchisees should inquire about the specific circumstances under which Face Foundrie might defer, reduce, or suspend marketing contributions to fully understand the potential implications for their business.