What is the definition of 'National Marketing Contribution' for a Floyds 99 franchise?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
National Marketing Contribution. You must remit to us a contribution ("National Marketing Contribution") to our national marketing fund of up to 3% of your Gross Sales. As of the date of this Disclosure Document, we collect a National Marketing Contribution of 1.5% of your Gross Sales. When combined with your Local Advertising Allocation, your total advertising obligation (your National Marketing Contribution plus Local Advertising Allocation) will not exceed 4% of your Gross Sales. The National Marketing Contribution is due to us along with your Royalty payment, payable weekly on the day of the week we periodically designate, based on the amount of Gross Sales in the previous week. We deposit the National Marketing Contributions collected from all FLOYD'S 99 Shops in a bank account separated from our operating account ("National Marketing Fund"). All affiliate-owned FLOYD'S 99 Shops pay into the National Marketing Fund on an equal percentage basis with all franchised FLOYD'S 99 Shops. If you request it in writing, we will send you an annual, unaudited financial statement for the National Marketing Fund which indicates how the National Marketing Fund has been spent during the previous calendar year. Because we do not have the Fund audited, audited financial statements are not available to franchisees.
We administer the National Marketing Fund in our sole discretion. The National Marketing Fund proceeds may be used for the implementation and administration of the National Marketing Fund, including the creation, production and placement of commercial advertising, agency costs and commissions, creation and production of video, audio, and written advertisements, including direct mail, radio and other media advertising and employing advertising agencies and in-house staff assistance, supporting public relations,
market research, brand recognition, point-of-purchase materials, third-party shopping services, gift card and stored value card programs, customer loyalty programs, sponsoring proprietary in-store music streaming programs, employee incentives and retention programs, training programs, Internet advertising, marketing through social media, website design and maintenance, electronic mail communication, and other advertising and marketing activities. We do not spend any of the National Marketing Fund on soliciting franchisees.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 31–38)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the National Marketing Contribution is a payment franchisees must make to the franchisor's national marketing fund. This contribution can be up to 3% of a franchisee's Gross Sales. As of the FDD date, Floyds 99 collects 1.5% of Gross Sales for this contribution. This contribution is combined with the Local Advertising Allocation, and the total advertising obligation will not exceed 4% of Gross Sales.
The National Marketing Contribution is due weekly, along with royalty payments, based on the previous week's Gross Sales. Floyds 99 deposits these contributions into a separate bank account called the National Marketing Fund, and all affiliate-owned Floyds 99 shops contribute to the fund on the same percentage basis as franchised locations. Franchisees can request an annual, unaudited financial statement showing how the National Marketing Fund was spent in the previous year.
Floyds 99 has sole discretion over administering the National Marketing Fund. The funds may be used for various marketing and advertising activities, including creating and placing commercials, covering agency costs, producing video, audio, and written advertisements, supporting public relations, conducting market research, developing point-of-purchase materials, supporting customer loyalty programs, sponsoring in-store music streaming, and implementing employee incentive programs. Notably, the funds cannot be used for soliciting new franchisees. The franchisor may also reimburse itself for administrative costs and overhead expenses related to managing the fund and its marketing programs. Floyds 99 does not guarantee that advertising expenditures from the National Marketing Fund will directly benefit any specific franchisee or on a pro rata basis, and the fund is not a trust fund.