Does the Golden Krust Caribbean Restaurant advertising fund cover salaries and administrative costs?

According to the 2024 Golden Krust Caribbean Restaurant Franchise Disclosure Document, the advertising fund can be used for reasonable salaries and administrative costs. Specifically, the advertising fund is used for the preparation, purchase, and placement of advertising materials. This includes creating video, audio, and written advertisements, managing regional and multi-regional advertising campaigns, purchasing direct mail and other media advertising, and hiring advertising, promotion, and marketing agencies.

In addition to these direct advertising expenses, the fund can also cover reasonable salaries, administrative costs, travel expenses, and overhead that Golden Krust Caribbean Restaurant incurs while administering the fund. This means that a portion of the advertising fees paid by franchisees may be used to compensate the franchisor for the costs associated with managing the advertising fund itself.

This arrangement is fairly typical in franchising, where advertising funds are often used to cover both direct advertising expenses and the administrative costs of managing the fund. However, prospective Golden Krust Caribbean Restaurant franchisees should request the annual statement of monies collected and costs incurred by the Advertising Fund to fully understand how the fund is being managed and how their contributions are being spent.