How will Face Foundrie use interest earned on marketing contributions?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) The Fund may spend in any calendar year more or less than the total Marketing Contributions in that year, borrow from us or others to cover deficits (which borrowing will include the payment of interest) or invest any surplus for future use. We will use interest earned on Marketing Contributions to pay costs before spending the Fund's other assets. 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.
- (f) We will prepare, on an annual basis, an unaudited statement of the earnings and expenditures of the Fund, and a copy of this statement will be made available within 60 days of our fiscal year end upon your written request. We are not required to have the Fund audited.
In our last fiscal year ended December 31, 2024, expenditures from the Fund by us were spent as follows:
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, the interest earned on marketing contributions will be used to pay costs before spending the marketing fund's other assets. Face Foundrie anticipates that all franchisees will contribute to the fund, although they retain the right to charge different rates to future franchisees.
Face Foundrie maintains significant control over the marketing fund. They have the authority to spend more or less than the total contributions in a given year, borrow funds to cover deficits (including paying interest on those borrowings), or invest any surplus for future use. This provides Face Foundrie with flexibility in managing the fund's resources and responding to changing market conditions.
Face Foundrie also has the ability to defer, reduce, or suspend marketing contributions for one or more periods, and even terminate the fund altogether. If the fund is terminated, Face Foundrie will either spend all remaining monies on advertising or promotional purposes or distribute the unspent funds to franchisees, Face Foundrie, and its affiliates in proportion to their contributions over the preceding twelve-month period. This ensures that any remaining funds are used for the benefit of the system or returned to the contributors.
Face Foundrie will prepare an unaudited statement of the fund's earnings and expenditures annually, which will be available to franchisees upon written request within 60 days of the fiscal year-end. While the statement is unaudited, it provides franchisees with some transparency into how the marketing funds are being managed. The fiscal year ends on December 31st.