Does Kitchen Solvers have a fiduciary obligation to franchisees with respect to the Brand Fund?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
We may increase the maximum annual contribution required upon thirty (30) days' prior written notice to you. All Brand Fund Fees will be placed in a Brand Fund managed by us, our affiliate, or our designee. We have the right to determine the methods of marketing, advertising, media employed and contents, terms and conditions of marketing campaigns and promotional programs, and we have no fiduciary obligation to franchisees with respect to the Brand Fund. Reasonable disbursements from the Brand Fund will be made for the payment of expenses incurred in connection with the cost of formulating, developing and implementing marketing, advertising and promotional campaigns; and the reasonable cost of administering the Brand Fund, including accounting expenses and the actual cost of salaries and fringe benefits paid to our employees or designees engaged in administration of the Brand Fund. You acknowledge and agree that media, materials and programs prepared using the Brand Fund may describe our franchise program, reference the availability of franchises and related information, and process franchise leads. If requested in writing by March 31st, we will provide you with an annual unaudited statement showing the receipts and disbursements of the Brand Fund for the immediately preceding calendar year within thirty (30) days after the issuance of the unaudited statement.
Source: Item 22 — Contracts (FDD page 49)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, Kitchen Solvers does not have a fiduciary obligation to franchisees regarding the Brand Fund. The Brand Fund is managed by Kitchen Solvers, an affiliate, or a designee, and Kitchen Solvers has the right to determine the marketing methods, advertising, media, and the terms and conditions of marketing campaigns and promotional programs. This means that Kitchen Solvers has broad discretion in how the Brand Fund is used.
Disbursements from the Brand Fund will cover expenses related to formulating, developing, and implementing marketing, advertising, and promotional campaigns. These disbursements also include the reasonable costs of administering the Brand Fund, such as accounting expenses and the salaries and benefits of employees or designees involved in its administration. The funds may also be used to describe the Kitchen Solvers franchise program, reference franchise availability, and process franchise leads, which may benefit Kitchen Solvers directly.
Kitchen Solvers will provide an annual unaudited statement of the Brand Fund's receipts and disbursements for the preceding calendar year if a franchisee requests it in writing by March 31st. This statement will be provided within thirty days after the issuance of the unaudited statement. While franchisees can request this information, the lack of a fiduciary obligation means Kitchen Solvers has significant leeway in managing the Brand Fund, which is a common practice in franchising where franchisors typically control marketing funds.