Is the Advertising Fund for Golden Krust Caribbean Restaurant audited?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
The Advertising Fund will be accounted for separately from our other funds and will not be used to defray our general operating expenses, except for such reasonable salaries, administrative costs, travel expenses and overhead as we incur in activities related to the administration of the Advertising Fund and its programs, including, without limitation, conducting market research, preparing advertising, promotion, and marketing materials and collecting and accounting for contributions to the Advertising Fund. We may spend, on behalf of the Advertising Fund, in any fiscal year an amount greater or less than the aggregate contribution to the Advertising Fund in that year, and the Advertising Fund may borrow from us or others to cover deficits or invest any surplus for future use. All interest earned on monies contributed to the Advertising Fund will be used to pay advertising costs before other assets of the Advertising Fund are expended. We will prepare an unaudited annual statement of monies collected and costs incurred by the Advertising Fund and furnish it to you upon written request. We have the right to cause the Advertising Fund to be incorporated or operated through a separate entity at such time as it deems appropriate, and the successor entity will have all of the rights and duties described here.
In 2023, the monies from the Advertising Fund were spent as follows: 45%for digital marketing and 55% for traditional marketing, including radio, design, and production. The Advertising Fund is not audited.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, OPERATIONS MANUAL, WEBSITE, AND TRAINING (FDD pages 18–23)
What This Means (2024 FDD)
According to the 2024 Franchise Disclosure Document, the Advertising Fund for Golden Krust Caribbean Restaurant is not audited. However, Golden Krust Caribbean Restaurant will prepare an unaudited annual statement of monies collected and costs incurred by the Advertising Fund and furnish it to franchisees upon written request.
In 2023, the monies from the Advertising Fund were spent with 45% allocated to digital marketing and 55% allocated to traditional marketing, including radio, design, and production. Golden Krust Caribbean Restaurant may spend more or less than the aggregate contribution to the Advertising Fund in any fiscal year, and the Advertising Fund may borrow to cover deficits or invest any surplus for future use. All interest earned on monies contributed to the Advertising Fund will be used to pay advertising costs before other assets of the Advertising Fund are expended.
Golden Krust Caribbean Restaurant does not have any advertising cooperatives. Franchisees are required to pay a weekly advertising fee equal to 1.5% of gross sales. Additionally, franchisees are required to spend 1% of annual gross sales on local marketing, including digital marketing. Golden Krust Caribbean Restaurant reserves the right to defer or reduce contributions of any franchisee and, upon thirty days' prior written notice, to reduce or suspend contributions to and operations of the Advertising Fund, or to terminate the Advertising Fund altogether.