What does the National Advertising Fund fee cover for a Golden Krust Caribbean Restaurant franchise?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty | 5% of Gross Sales2 or | Payable weekly | See Note 2 for the definition of |
| $250 weekly, whichever is greater | by our sweep via EFT | "Gross Sales." Gross Sales are reported on the 3rd business day of the month, but we reserve the right to change this. | |
| National | 1.5% of Gross Sales | Payable weekly | An additional 1% of annual Gross |
| Advertising Fund | by our sweep via EFT | Sales must be spent on local store ma |
Source: Item 6 — OTHER FEES (FDD pages 11–13)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, franchisees must pay a National Advertising Fund fee of 1.5% of Gross Sales, payable weekly via EFT. In addition to this, franchisees are required to spend an additional 1% of annual Gross Sales on local store marketing initiatives. The FDD does not specify what the 1.5% contribution to the National Advertising Fund covers.
While the FDD states the amount and frequency of payments to the National Advertising Fund, it does not detail the specific activities or marketing initiatives this fund supports. Common uses for national advertising funds in franchising include developing brand marketing campaigns, creating advertising materials, conducting market research, and managing the brand's online presence.
A prospective Golden Krust Caribbean Restaurant franchisee should ask the franchisor for a detailed breakdown of how the National Advertising Fund is used. Understanding the allocation of these funds will help the franchisee assess the value and effectiveness of the national advertising efforts and how they contribute to the overall brand awareness and customer acquisition.