Are all Golden Krust Caribbean Restaurant franchisees required to pay the same advertising fee?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
You will be required to pay to us a weekly advertising fee equal to one-and-one-half percent (1.5%) of the Gross Sales of the Restaurant. This advertising fee is paid with the weekly royalty payment, but will be segregated by us in a special account maintained solely for the advertising fund.
We do not collect the same amount as an Advertising Fee from all Golden Krust franchisees, but reserve the right to do so. We may reduce or waive (and we have reduced or waived) the advertising fee in certain instances and for certain franchisees, including, but not limited to franchisees who are shareholders or employees (along with their children and/or heirs) of the franchisor or its affiliates. There are franchisees who pay a lower or no advertising fee.
You will also be required to expend 1% of the annual Gross Sales from the operation of your Restaurant on local marketing, including but not limited to digital marketing.
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 Golden Krust Caribbean Restaurant Franchise Disclosure Document, not all franchisees pay the same advertising fee. While franchisees are generally required to pay a weekly advertising fee equal to 1.5% of their restaurant's gross sales, Golden Krust Caribbean Restaurant reserves the right to modify this fee. This advertising fee is paid along with the weekly royalty payment and is kept separate in an advertising fund.
Golden Krust Caribbean Restaurant may reduce or waive the advertising fee for certain franchisees. This includes, but is not limited to, franchisees who are shareholders or employees (along with their children and/or heirs) of the franchisor or its affiliates. The document explicitly states that there are franchisees who pay a lower or no advertising fee.
In addition to the advertising fee, franchisees are also required to spend 1% of their annual gross sales on local marketing, including digital marketing. This local marketing expenditure is separate from the advertising fee managed by Golden Krust Caribbean Restaurant. Franchisees must also adhere to ethical marketing standards and promotion policies set by Golden Krust Caribbean Restaurant, and any advertising materials not prepared or pre-approved by the company must be submitted for approval, with approval deemed granted if no written disapproval is received within 15 days.