Who maintains and administers 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. Neither the National Fund nor any Regional Fund described in Sections 11.2 and 11.3 hereof is a trust fund and Franchisor shall have no fiduciary responsibility to Franchisee in connection with the collection or use of any National or Regional Fund's monies or any other aspect of the Funds' operations.
- 11.2.5 It is anticipated that all contributions to and earnings of the National Fund shall be expended for advertising and/or promotional purposes during the taxable year within which the contributions are made.
Source: Item 22 — CONTRACTS (FDD pages 84–85)
What This Means (2025 FDD)
According to Golden Corral's 2025 Franchise Disclosure Document, the franchisor is responsible for maintaining and administering the National Fund. The funds are used to cover the costs of advertising and promotional activities that aim to increase system revenues and enhance the image of the Golden Corral system and its proprietary marks. These activities include promotional programs, advertising campaigns, marketing surveys, public relations, product development, and providing marketing materials for franchisees and company-owned restaurants.
The franchisor also contributes to the National Fund for its company-owned facilities on the same basis as franchisees. All sums paid into the National Fund are kept in separate accounts from the franchisor's other monies. These funds cannot be used for the franchisor's expenses, except for reasonable administrative costs related to the National Fund's administration or advertising programs, including the costs of enforcing contributions and preparing financial statements.
Golden Corral is required to maintain separate bookkeeping accounts for the National Fund. An independent certified public accountant, selected by Golden Corral, reviews the fund's operations annually, and the statement of operations is made available to franchisees upon reasonable notice. While Golden Corral intends for the National Fund to be perpetual, it retains the right to terminate the fund, but only after all monies have been spent on advertising and promotional purposes or returned to the contributors based on their contributions.
It is important to note that the FDD states that neither the National Fund nor any Regional Fund is a trust fund, and Golden Corral has no fiduciary responsibility to franchisees regarding the collection or use of these funds. This means that while the franchisor manages the funds, they are not held in trust for the franchisees, and the franchisor's obligations are defined by the franchise agreement rather than traditional fiduciary duties.