Will Golden Krust Caribbean Restaurant franchisees receive an annual statement of the Advertising Fund?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
The advertising fund will be spent only for the preparation, purchase and placement of advertising, including but not limited to preparing and producing video, audio and written advertising materials, administering regional and multi-regional advertising, purchasing direct mail and other media advertising and employing advertising promotion and marketing agencies to provide assistance and supporting public relations, market research and other advertising, promotion and marketing activities, except for such reasonable salaries, administrative costs, travel expenses and overhead as we incur in administering the fund. The Advertising Fund periodically will furnish you with samples of advertising, marketing and promotional formats and materials at no cost. Multiple copies of such materials will be furnished to you at our direct cost of producing them, plus any related shipping, handling and storage charges. The fund is intended to further recognition and acceptance of the Golden Krust name, marks and products, and we reserve the sole discretion in administering the fund as well as for the creation, design, development, selection and placement of advertising.
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
Based on the 2024 Franchise Disclosure Document, the Golden Krust Caribbean Restaurant franchise agreement does not explicitly state that franchisees will receive an annual statement of the Advertising Fund. However, the agreement does state that the Advertising Fund will periodically furnish franchisees with samples of advertising, marketing, and promotional formats and materials at no cost. Multiple copies of such materials will be furnished at the direct cost of producing them, plus any related shipping, handling, and storage charges.
While the agreement outlines how the advertising fees are collected (1.5% of gross sales, paid weekly via electronic funds transfer) and how the fund is intended to be used (preparation, purchase, and placement of advertising), it does not specify the frequency or format of financial reports provided to franchisees. The agreement mentions that 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.
As the FDD does not explicitly confirm that Golden Krust Caribbean Restaurant provides an annual statement, prospective franchisees should directly ask the franchisor about the availability and frequency of Advertising Fund statements to ensure transparency and accountability in the use of advertising fees. Understanding how the fund is managed and reported is crucial for franchisees to assess the value and effectiveness of their advertising contributions.