Can Focalpoint Coaching use the Advertising and Development Fund for its general operating expenses?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor will account for the Fund separately from Franchisor's other funds and not use the Fund for any of Franchisor's general operating expenses. However, Franchisor 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, overhead relating to Fund business, and other expenses that Franchisor incurs in activities reasonably related to administering or directing the Fund and its programs, including, without limitation, conducting market research, public relations, preparing advertising, promotion, and marketing materials, and collecting and accounting for Fund contributions.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, the franchisor is restricted from using the Advertising and Development Fund for its general operating expenses. However, Focalpoint Coaching can use the fund to cover specific expenses related to managing and administering the fund itself.
These allowable expenses include the salaries and benefits of personnel who manage the fund, administrative costs, travel expenses incurred while conducting fund business, meeting costs, and overhead related to fund activities. Additionally, the fund can be used for expenses related to market research, public relations, and the creation of advertising, promotion, and marketing materials. It can also be used for collecting and accounting for fund contributions.
This means that while Focalpoint Coaching cannot use the advertising fund to pay for its day-to-day business operations, it can use the funds to offset the costs of managing the advertising and marketing efforts. This is a fairly standard practice in franchising, where advertising funds are typically used for the benefit of the entire franchise system, but the franchisor is allowed to use a portion of the fund to cover administrative expenses.