Can Fly To Fit Franchise establish a Marketing Fund?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
9.2 Use by Fly To Fit Franchise.** Fly To Fit Franchise may use any marketing materials or campaigns developed by or on behalf of Franchisee, and Franchisee hereby grants an unlimited, perpetual, royalty-free license to Fly To Fit Franchise for such purpose.
- 9.3 Marketing Fund. Fly To Fit Franchise may establish a Marketing Fund to promote the System on a local, regional, national, and/or international level. If Fly To Fit Franchise has established a Marketing Fund:
- (a) Separate Account. Fly To Fit Franchise shall hold the Marketing Fund Contributions from all franchisees in one or more bank accounts separate from Fly To Fit Franchise's other accounts.
- (b) Use. Fly To Fit Franchise shall use the Marketing Fund only for marketing, advertising, and public relations materials, programs and campaigns (including at local, regional, national, and/or international level), and related overhead. The foregoing includes such activities and expenses as Fly To Fit Franchise reasonably determines, and may include, without limitation: development and placement of advertising and promotions; sponsorships; contests and sweepstakes; development of décor, trade dress, Marks, and/or branding; development and maintenance of brand websites; social media; internet activities; e-commerce programs; search engine optimization; market research; public relations, media or agency costs; trade shows and other events; printing and mailing; and administrative and overhead expenses related to the Marketing Fund (including the compensation of Fly To Fit Franchise's employees working on marketing and for accounting, bookkeeping, reporting, legal and other expenses related to the Marketing Fund).
- (c) Discretion. Franchisee agrees that expenditures from the Marketing Fund need not be proportionate to contributions made by Franchisee or provide any direct or indirect benefit to Franchisee. The Marketing Fund will be spent at Fly To Fit Franchise's sole discretion, and Fly To Fit Franchise has no fiduciary duty with regard to the Marketing Fund.
- (d) Contribution by Other Outlets.
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, Fly To Fit may establish a Marketing Fund to promote the System on a local, regional, national, and/or international level. If Fly To Fit establishes a Marketing Fund, it will hold the Marketing Fund contributions from all franchisees in one or more bank accounts separate from Fly To Fit's other accounts. Fly To Fit will use the Marketing Fund only for marketing, advertising, and public relations materials, programs, and campaigns (including at local, regional, national, and/or international level), and related overhead.
Fly To Fit shall manage the Marketing Fund. Franchisees are required to pay a Marketing Fund Contribution equal to 1% of Gross Sales (or such lesser amount as Fly To Fit determines), at the same time as the Royalty Fee. Fly To Fit will prepare an unaudited annual financial statement of the Marketing Fund within 120 days of the close of Fly To Fit's fiscal year and will provide the financial statement to Franchisee upon request.
Fly To Fit may also establish market advertising and promotional cooperative funds ("Market Cooperative") in any geographical areas. If a Market Cooperative for the geographic area encompassing the Location has been established at the time Franchisee commences operations hereunder, Franchisee shall immediately become a member of such Market Cooperative. If the Business participates in a Market Cooperative, then Franchisee shall contribute to the Market Cooperative a percentage of Gross Sales (or other amount) determined by the Market Cooperative, not to exceed 5%.