Can the Fitstop Brand Development Fund be used for market research?
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. Materials provided by the Fund to all Franchisees may include video and audio tapes, mats, posters, banners, and miscellaneous point-of-sale items. You will receive one sample of each at no charge.
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 market research. Fitstop has sole discretion as to how the money is spent to promote the growth of the Fitstop system. This includes using the fund for market research, promotional marketing, public relations, and advertising expenses. Fitstop can also use the fund to hire marketing, public relations, and advertising agencies, as well as internal personnel to assist in developing the brand name and average unit volumes.
Additionally, the Brand Development Fund can cover expenses associated with listings in telephone books, subsidies of premiere/marquis locations designed to garner media attention and promote the brand name, and travel expenses in connection with promotions and marketing meetings. The fund can also be used for training, development of Proprietary Marks and trademarked materials, production of circulars, media, advertisements, coupons, and promotional materials, including point-of-purchase materials.
Fitstop also specifies that the Brand Development Fund can be used for developing training tools designed to assist System franchisees, the cost of developing and maintaining an Internet website and other digital marketing tools, and developing and deploying mystery shopper programs. Fitstop is not required to spend any advertising funds in a franchisee's specific area or territory. The materials provided by the Fund to all Franchisees may include video and audio tapes, mats, posters, banners, and miscellaneous point-of-sale items, with each franchisee receiving one sample of each at no charge.
Fitstop states that it may use advertising fees paid by franchisees to place advertising in national media, including broadcast, print, or other media. Advertising funds are used to promote the products sold by franchisees. A brief statement regarding the availability of information regarding the purchase of a franchise may be included in the advertising and other items produced using the Fund, with the understanding that Fitstop will not use Fund amounts in connection with marketing that is designed to principally sell franchises.