Under what condition is the Flowerama local advertising fee cancelled?
Flowerama Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type Of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty – Floral Business | 6% of Gross Sales2 | 15 days after end of week in which gross sales made | Reduced to 5% if payment made by 3rd calendar day after close of week for which payment due. |
| Royalty – Fruit Bouquets | 6% of Fruit Bouquets Gross Sales2 | Payable monthly on the 10th day of the next month | Payable if you purchase the Fruit Bouquets Program. |
| Local Advertising | 1% of Gross Sales2 | As incurred annually | Payable to third parties. This fee is cancelled if a Marketing Fund is established. |
| Marketing Fund – Floral Business | 2% of Gross Sales2 | Payable monthly on the 10th day of the next month | Payable to us only if a Marketing Fund is established. |
Source: Item 6 — OTHER FEES1 (FDD pages 15–19)
What This Means (2024 FDD)
According to the 2024 Flowerama Franchise Disclosure Document, the local advertising fee is cancelled if a Marketing Fund is established. The local advertising fee is 1% of gross sales and is paid to third parties as incurred annually. If a Marketing Fund is established, franchisees will instead pay 2% of gross sales to Flowerama monthly on the 10th day of the next month.
This means that Flowerama franchisees may be required to contribute to a marketing fund managed by the franchisor instead of managing their own local advertising. The establishment of a marketing fund centralizes advertising efforts, potentially leading to more coordinated and effective campaigns. However, it also means franchisees lose direct control over how their advertising dollars are spent.
Prospective franchisees should inquire about the likelihood of a Marketing Fund being established, how it would be managed, and what benefits it would provide compared to local advertising efforts. Understanding the franchisor's plans for marketing and advertising is crucial for making an informed investment decision.