Are there any exceptions to the requirement that a Fitstop franchisee contribute to the brand development Fund?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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.
Where your advertising campaign is not in conformance with the Manual(s), you will submit to us all advertising plans and advertising materials of any type, including, but not limited to, any digital media communication methods such as websites, blogs, instant message services, social media sites (i.e., Facebook, Twitter, Instagram, TikTok) and any comparable digital media communications at least 30 calendar days prior to publication, including any advertising on the internet, for our approval which we may grant or withhold in our sole judgment or modify at our discretion.
- 6.7 Ownership Acknowledgement. The approval by us of your advertising plans or advertising materials shall not, directly or indirectly, require us to pay for such advertising plans or advertising materials.
Moreover, we can, at our discretion, adopt such advertising plans or advertising materials and use them for our own benefit or disseminate them for use by other franchisees.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees are generally required to contribute to the brand development fund. The standard contribution is 2% of the Gross Revenue generated by the Franchised Business. These Fund Contributions are typically billed and collected at the same time and manner as the recurring Royalty Fee.
Fitstop uses the brand development fund to promote, market, advertise, and develop the System, Proprietary Marks, System Business locations, Approved Services/Products, and the Fitstop brand in general. Fitstop has sole discretion in administering the marketing fees.
The FDD states that advertising campaigns not conforming to the manual(s) must be submitted to Fitstop for approval 30 days prior to publication. The franchisee is responsible for the costs of their advertising plans and advertising materials, even if Fitstop approves them and uses them for their own benefit or disseminates them for use by other franchisees. The FDD mentions that the exceptions to the advertising and advertising materials are identified in the agreement and the manuals.