What is the intended purpose of the Golden Krust Caribbean Restaurant 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)
According to the 2024 Golden Krust Caribbean Restaurant Franchise Disclosure Document, the advertising fund is intended to enhance the recognition and acceptance of the Golden Krust name, marks, and products. The franchisor, Golden Krust, has sole discretion in administering the fund and creating, designing, developing, selecting, and placing advertising. This means that while franchisees contribute to the fund, Golden Krust ultimately decides how the money is spent to promote the brand.
The advertising fund will be used for preparing, purchasing, and placing advertisements. This includes producing video, audio, and written advertising materials, managing regional and multi-regional advertising campaigns, purchasing direct mail and other media advertising, and employing advertising, promotion, and marketing agencies. The fund also covers public relations, market research, and other advertising, promotion, and marketing activities. However, the fund can also be used to cover reasonable salaries, administrative costs, travel expenses, and overhead incurred by Golden Krust in administering the fund.
Golden Krust Caribbean Restaurant will periodically provide franchisees with samples of advertising, marketing, and promotional materials at no cost. Franchisees can obtain multiple copies of these materials at Golden Krust's direct cost of production, plus any related shipping, handling, and storage charges. This allows franchisees to supplement the broader advertising efforts with local promotions, while still maintaining brand consistency. Franchisees are also required to expend 1% of their annual gross revenues on local marketing, giving them some control over advertising efforts in their immediate area.