What is the contractual obligation Focalpoint Coaching has regarding the Advertising and Development Fund contributions?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
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The Fund is not our asset. The Fund also is not a trust. We have a contractual obligation to hold all Fund contributions for the benefit of the contributors and to use contributions only for their permitted purposes (described above). We do not have a fiduciary obligation to you for administering the Fund. The Fund may spend in any fiscal year more or less than the total Fund contributions in that year, borrow from us or others (paying reasonable interest) to cover deficits, pay back outstanding principal amounts borrowed in prior years from us or third parties, or invest any surplus for future use. We do not expect to use any of the Fund contributions specifically to develop materials and programs to solicit franchisees. However, media, materials, and programs, including our Website, prepared using Fund contributions may describe our franchise program, reference the availability of franchises and related information, and process franchise leads. We will prepare an annual, unaudited statement of Fund collections and expenses and give it to you upon written request. We may have the Fund audited annually, at the Fund's expense, by an independent certified public accountant. We may incorporate the Fund or operate it through a separate entity when we think best. The successor entity will have all of the rights and duties described here.
During fiscal year 2024 the Fund contributions were spent as follows: 10% on media placement, 75% on production expenses, and 15% on administrative expenses.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 28–36)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, Focalpoint Coaching has a contractual obligation to hold all Advertising and Development Fund contributions for the benefit of the contributors and to use the contributions only for their permitted purposes. These permitted purposes include advertising, marketing, and public relations programs and materials.
The document specifies that the Fund is not an asset of Focalpoint Coaching and is not considered a trust. While Focalpoint Coaching has a contractual obligation to manage the funds for the benefit of the franchisees, it does not have a fiduciary obligation to the franchisees in administering the Fund.
Focalpoint Coaching has the ability to manage the Fund's finances, including spending more or less than the total contributions in a given year, borrowing funds to cover deficits, repaying borrowed amounts, or investing any surplus for future use. The FDD states that Focalpoint Coaching will provide an annual, unaudited statement of Fund collections and expenses to franchisees upon written request and may have the fund audited annually at the Fund's expense.