For whose benefit is the Fitstop brand development Fund maintained?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
We currently expect and plan to administer a brand development fund (the "Fund") for the benefit of the entire System. We use the Fund to meet certain costs related to maintaining, administering, directing, conducting and preparing advertising, marketing, public relations, and/or promotional programs and materials, and any other activities which we believe will enhance the image of the System. Your current Fund Contribution will be two percent (2%) of the Gross Revenue generated by your Franchised Business.
Currently, affiliate-owned locations may – but are not obligated to – contribute to the Fund in the same amount and manner as System Franchised Businesses. Other System franchisees' respective Fund contributions may be calculated at a different rate or on a different basis and, under limited circumstances, certain franchisees may not be required to pay Fund fees.
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 (the "Fund") is administered for the benefit of the entire Fitstop system. The fund is intended to cover costs related to advertising, marketing, public relations, and promotional programs and materials. These activities are designed to enhance the overall image of the Fitstop system.
Franchisees are required to contribute to the Fund, with the current contribution set at two percent (2%) of their Franchised Business's Gross Revenue. While affiliate-owned locations may contribute to the Fund, they are not obligated to do so. It's also possible for other franchisees to have different contribution rates or, in some cases, be exempt from paying Fund fees altogether.
Fitstop retains full discretion over how the advertising funds are spent, with the goal of promoting and growing the system. This includes promotional marketing, public relations, advertising expenses, hiring agencies and personnel, listings in telephone books, subsidies for premiere locations, travel expenses for promotions, training, development of trademarks, production of advertising materials, market research, website development, mystery shopper programs, and any other use Fitstop determines. Fitstop is not required to spend any advertising funds in a franchisee's specific area or territory. The FDD indicates that as of the issue date of the document, Fitstop had not yet established a Fund.