What is the definition of 'Fund Contributions' for a Fitstop franchise?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
franchisee/developer, and (b) we otherwise provide our prior written consent.
- 6.5 Brand Development Fund. We have established or expect to establish a brand development fund (the "Fund") designed to promote, advertise, market and/or otherwise develop the System, Proprietary Marks, System Business(es), Approved Services/Products and/or our brand generally. You will be required to contribute to the Fund an amount equal to two percent (2%) of the Gross Revenue of the Franchised Business ("Fund Contributions"), which shall be remitted to us at the same time and in the same manner as your Royalty Fees (unless we designate another method upon at least 30 days' prior written notice via the Manual(s) or otherwise). All Fund Contributions are non-refundable upon payment, and we will account separately for all sums paid to the Fund.
- 6.6 System Marketing Material and/or Promotional Campaigns. We will direct all advertising programs and have sole discretion to approve or disapprove the creative concepts, materials, and media used in the programs. Based thereon, we will have sole discretion to administer the marketing fees this Agreement describes herein. Subject to the exceptions this Agreement identifies and the Manual(s), you shall use only advertising and advertising materials we provide.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fund Contributions are payments that franchisees must make to the brand development fund. These contributions are calculated as two percent (2%) of the Gross Revenue generated by the Franchised Business. Gross Revenue includes the total amount of consideration, whether cash, credit, or payment in kind, received for all goods and services, including membership fees.
The Fund Contributions are used to promote, market, advertise, and develop the Fitstop system, Proprietary Marks, System Business locations, Approved Services/Products, and the brand in general. Fitstop has the discretion to decide how the fund is administered and used. These contributions are billed and collected at the same time and manner as the recurring Royalty Fee.
It's important to note that Fund Contributions are non-refundable upon payment. Fitstop is not required to spend any specific portion of the Fund or a franchisee's contributions on marketing or services specifically allocated to their Designated Territory. This means that while franchisees contribute to the fund, they may not directly benefit from its use in their particular area.