Is the Focalpoint Coaching Advertising and Development Fund considered an asset of the franchisor?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
The Fund will not be Franchisor's asset. Although the Fund is not a trust, Franchisor will hold all Fund contributions for the benefit of the contributors and use contributions only for the purposes described in this Subsection 9.A. Franchisor does not owe any fiduciary obligation to Franchisee for administering the Fund or any other reason. The Fund may spend in any fiscal year more or less than the total Fund contributions in that year, borrow from Franchisor or others (paying reasonable interest) to cover deficits, pay back outstanding principal amounts borrowed in prior years from Franchisor or third parties, or invest any surplus for future use. Franchisor will use all interest earned on Fund contributions to pay costs before using the Fund's other assets.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, the Advertising and Development Fund is not considered an asset of the franchisor. While Focalpoint Coaching manages the fund, it holds all contributions for the benefit of the contributors, using them specifically for the purposes outlined in the FDD.
Focalpoint Coaching accounts for the fund separately from its other funds and will not use it for general operating expenses. However, the company can use the fund to cover reasonable salaries and benefits for personnel managing the fund, administrative costs, travel expenses related to fund business, meeting costs, overhead, and other expenses reasonably related to administering the fund and its programs. These programs include market research, public relations, and preparing advertising and marketing materials.
Although the fund is not a trust, Focalpoint Coaching states that it will hold all Fund contributions for the benefit of the contributors. The fund may spend more or less than the total contributions in a given fiscal year, borrow funds to cover deficits, repay borrowed amounts, or invest any surplus for future use. Any interest earned on fund contributions will be used to pay costs before using the fund's other assets.
Focalpoint Coaching will provide an annual unaudited statement of fund collections and expenses to franchisees upon written request and reserves the right to have the fund audited annually at the fund's expense.