How often is the advertising fee paid by Golden Krust Caribbean Restaurant franchisees?
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.
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.
We reserve the right to defer or reduce contributions of any franchisee and, upon thirty (30) days' prior written notice to you, to reduce or suspend contributions to and operations of the Advertising Fund for one or more periods of any length and to terminate (and, if terminated, to reinstate) the Advertising Fund. If the Advertising Fund is terminated, all unspent monies on the date of termination will, at our discretion, be spent or distributed to franchisees in proportion to their respective contributions to the Advertising Fund during the preceding twelve (12) month period.
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.
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 Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, franchisees are required to pay an advertising fee weekly, which is equal to 1.5% of the restaurant's gross sales. This fee is remitted along with the weekly royalty payment but is maintained by Golden Krust Caribbean Restaurant in a separate account specifically for the advertising fund.
In addition to the advertising fee, Golden Krust Caribbean Restaurant franchisees must also spend 1% of their annual gross sales on local marketing initiatives, including digital marketing. All advertising and marketing materials, whether created by the franchisee or provided by Golden Krust Caribbean Restaurant, must be clear, factual, and ethical, adhering to the company's promotion policies. Franchisees who create their own advertising materials must submit them for approval, and unapproved materials cannot be used.
Golden Krust Caribbean Restaurant retains the right to modify or terminate the Advertising Fund, including deferring, reducing, or suspending contributions. In the event of termination, any unspent funds will be either spent or distributed to franchisees based on their contributions over the preceding 12-month period. Some franchisees may pay a lower or no advertising fee. 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.