Can Face Foundrie use the System Marketing Fund for out-of-pocket expenses?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
This includes the costs (including, without limitation, reasonable salaries and overhead incurred by us) of creating, preparing, administering, directing, and conducting media marketing campaigns and System advertising, marketing and sales programs and campaigns; consumer research and marketing surveys designed to assist in maintaining high quality standards; public relations activities; trade show participation (including travel and expenses for our staff); the development and operation of a national and regional accounts program; online directory listings; developing, enhancing, and maintaining our Website and other Internet marketing, as well as social media and other digital applications (and other successor technology platforms); sponsorship of organizations and events; purchasing promotional items and advertising materials; out-of-pocket expenses (including printing, postage, shipping, telephone and photocopying); our allocable overhead and administrative costs (including compensation and expenses of employees relating to the Fund); and providing promotional and other marketing materials and services to the Facial Bars operating under the System.
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 System Marketing Fund can be used for out-of-pocket expenses. Specifically, the fund can cover out-of-pocket expenses including printing, postage, shipping, telephone, and photocopying. This means that a portion of the franchisee's marketing contributions could be allocated to these types of operational costs incurred by Face Foundrie when administering the fund.
This arrangement is fairly typical in franchising, where marketing funds are used to cover a range of expenses beyond just advertising. It is important to note that Face Foundrie has sole discretion over how the fund is spent, and is not obligated to ensure that any franchisee benefits directly or proportionally from the expenditures. Face Foundrie also states that they have no fiduciary obligation to franchisees regarding the fund's administration.
Prospective Face Foundrie franchisees should be aware that while the marketing fund can be used for out-of-pocket expenses, Face Foundrie also uses the fund for a variety of other activities. These activities include creating and conducting marketing campaigns, consumer research, public relations, trade show participation, website development, social media, and purchasing promotional items. Additionally, the fund can be used to cover reasonable salaries and overhead incurred by Face Foundrie. Franchisees should consider how these various uses of the fund align with their expectations for brand promotion and support.