Does Focalpoint Coaching have a fiduciary obligation to franchisees for administering the Advertising and Development Fund?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
We will account for the Fund separately from our other funds and not use the Fund for its or our general operating expenses. However, we may use the Fund to pay the reasonable salaries and benefits of personnel who manage and administer the Fund, the Fund's other administrative costs, travel expenses of personnel while they are on Fund business, meeting costs, exposition and show costs, overhead relating to Fund business, and other expenses that we incur in activities reasonably related to administering or directing the Fund and its programs, including conducting market research; public relations; preparing advertising, promotion, and marketing materials; and collecting and accounting for Fund contributions.
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 does not have a fiduciary obligation to franchisees for administering the Advertising and Development Fund. However, Focalpoint Coaching has a contractual obligation to hold all Fund contributions for the benefit of the contributors and to use contributions only for their permitted purposes. These permitted purposes include paying the reasonable salaries and benefits of personnel who manage and administer the Fund, the Fund's other administrative costs, travel expenses of personnel while they are on Fund business, meeting costs, exposition and show costs, overhead relating to Fund business, and other expenses that Focalpoint Coaching incurs in activities reasonably related to administering or directing the Fund and its programs, including conducting market research; public relations; preparing advertising, promotion, and marketing materials; and collecting and accounting for Fund contributions.
The Fund is not an asset of Focalpoint Coaching, nor is it a trust. Focalpoint Coaching will account for the Fund separately from its other funds and will not use the Fund for its or its general operating expenses. The Fund may spend more or less than the total Fund contributions in any fiscal year, borrow from Focalpoint Coaching or others to cover deficits, pay back outstanding principal amounts borrowed in prior years, or invest any surplus for future use.
During the fiscal year 2024, the Fund contributions were allocated as follows: 10% on media placement, 75% on production expenses, and 15% on administrative expenses. Focalpoint Coaching will prepare an annual, unaudited statement of Fund collections and expenses and provide it to franchisees upon written request. Focalpoint Coaching may also have the Fund audited annually, at the Fund's expense, by an independent certified public accountant.