Can the Fitstop Brand Development Fund be used for the cost of developing and maintaining an Internet website and other digital marketing tools?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
With any advertising funds paid, we have sole discretion as to how and where the money is spent to promote, enhance, or further the growth of the system, including, without limitation, promotional marketing, public relationships, and advertising expenses, hiring marketing, public relations and advertising agencies and internal personnel to assist in developing the brand name and average unit volumes, expenses associated with listings in telephone books, subsidies of premiere/marquis locations designed to garner media attention and promote the brand name, travel expenses in connection with promotions and marketing meetings, training, development of Proprietary Marks and trademarked materials, production of circulars, media, advertisements, coupons, and promotional materials (including point of purchase materials), market research, developing training tools designed to assist System franchisees, the cost of developing and maintaining an Internet website and other digital marketing tools, developing and deploying mystery shopper programs and for any other use we determine. Additionally, we can use the Fund to pay for expenses incurred in developing and maintaining non-franchise sales portion of our primary brand website. We are not required to spend any advertising funds in your specific area or territory.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 24–35)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the Brand Development Fund can be used for the cost of developing and maintaining an Internet website and other digital marketing tools. Fitstop has sole discretion as to how and where the money is spent to promote, enhance, or further the growth of the system.
This includes promotional marketing, public relations and advertising expenses, hiring marketing, public relations and advertising agencies and internal personnel to assist in developing the brand name and average unit volumes. It also covers expenses associated with listings in telephone books, subsidies of premiere/marquis locations designed to garner media attention and promote the brand name, travel expenses in connection with promotions and marketing meetings, training, and development of Proprietary Marks and trademarked materials.
Furthermore, the fund can be used for the production of circulars, media, advertisements, coupons, and promotional materials (including point of purchase materials), market research, developing training tools designed to assist System franchisees. Fitstop can also use the Fund to pay for expenses incurred in developing and maintaining the non-franchise sales portion of their primary brand website. However, Fitstop is not required to spend any advertising funds in a franchisee's specific area or territory.
For a prospective franchisee, this means that a portion of their gross revenue (currently 2%) goes into a fund that Fitstop controls and uses to market the brand. While Fitstop can use the fund for digital marketing and website development, there's no guarantee that these efforts will directly benefit the franchisee's specific location. It is important to note that as of the issue date of the 2024 FDD, Fitstop had not yet established a Brand Development Fund.