What is the intended purpose of the National Fund for Golden Corral?
Golden_Corral Franchise · 2025 FDDAnswer from 2025 FDD Document
nd acceptance of the Proprietary Marks for the benefit of all restaurants within the System, and that Franchisor and its designees are not obligated in administering the National Fund to make expenditures for Franchisee which are equivalent or proportionate to Franchisee's contribution or to ensure that any particular Franchisee benefits directly or pro rata from the placement of advertising.
- 11.2.2 The National Fund and all contributions thereto, and any earnings thereon, shall be used exclusively to meet any and all costs of maintaining, administering, researching, directing, creating, and preparing advertising and/or promotional activities and all other activities which Franchisor believes will increase System revenues and/or enhance the image of the System and/or Proprietary Marks, including, without limitation, the costs of preparing, creating and conducting promotional programs involving use of stored value gift cards and other forms of non-cash payment systems, customer loyalty programs and similar types of programs; advertising campaigns in various media and the internet; direct mail and outdoor billboard advertising; marketing surveys and other public relations activities, customer feedback and similar activities; employing advertising and/or public relations agencies to assist therein; product development; and providing promotional, point of purchase/in-Restaurant materials and other marketing materials for franchisees and company-owned restaurants in the System.
- 11.2.3 Franchisor shall, for each of its company-owned facilities (if any), make contributions to the National Fund on the same basis as assessments required of comparable franchisees within the System.
- 11.2.4 Franchisee shall contribute to the National Fund weekly as described in Section 4.3 hereof. All sums paid by Franchisee to the National Fund shall be maintained in an account or accounts separate from the other monies of Franchisor. Such sums shall not be used to defray any of Franchisor's expenses, except for such reasonable administrative costs and overhead, if any, as Franchisor may incur in activities reasonably related to the administration or direction of the National Fund or advertising programs for franchisees and the System, including the costs of enforcing contributions to the Fund required under this Agreement, and the costs of preparing the statement of operations, as required under Section 11.2.6 hereof, and the cost of personnel for creating and implementing all such activities. The National Fund and its earnings shall not otherwise inure to the benefit of Franchisor. Franchisor shall maintain separate bookkeeping accounts for the Fund.
Source: Item 22 — CONTRACTS (FDD pages 84–85)
What This Means (2025 FDD)
According to the 2025 Golden Corral FDD, the National Fund, including all contributions and earnings, is to be used exclusively for the costs of maintaining, administering, researching, directing, creating, and preparing advertising and promotional activities. These activities are intended to increase system revenues and enhance the image of the Golden Corral system and its Proprietary Marks. This includes promotional programs using stored value gift cards, customer loyalty programs, advertising campaigns across various media, direct mail, outdoor billboard advertising, marketing surveys, public relations, customer feedback activities, employing advertising and public relations agencies, product development, and providing promotional materials for both franchisees and company-owned restaurants.
Golden Corral itself contributes to the National Fund for its company-owned facilities on the same basis as required from comparable franchisees. Franchisees are required to contribute to the National Fund weekly. All sums paid by franchisees are maintained separately from Golden Corral's other monies. These funds cannot be used to cover Golden Corral's expenses, except for reasonable administrative costs and overhead related to the administration or direction of the National Fund, advertising programs, costs of enforcing contributions, preparing the statement of operations, and the cost of personnel for creating and implementing these activities.
The FDD specifies that the National Fund is not an asset of Golden Corral, and its earnings should not benefit Golden Corral, except as described above. While Golden Corral intends for the National Fund to be perpetual, it retains the right to terminate the fund. However, the fund cannot be terminated until all monies have been spent on advertising and promotional purposes or returned to the contributors based on their respective contributions. A statement of the National Fund's operations, as shown on Golden Corral's books, will be reviewed annually by an independent certified public accountant and made available to franchisees upon reasonable notice.