What is FAT's role in the advertising programs for Marble Slab Creamery?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
ng that was primarily a solicitation for the sale of franchisees.
Currently, FAT utilizes a variety of shared (e.g., Public Relations personnel, Graphic Designers, Social Media Manager, Advertising Agencies, etc.,) and non-shared or "dedicated" (e.g., brand specific marketing personnel) marketing resources to support marketing and advertising initiatives across all of its brands. Regardless of whether the resource is shared or non-shared, the Fund and advertising funds of other FAT-owned franchising companies bear an equitably allocated share of expenses related to these resources based on metrics determine by FAT in its good faith discretion (e.g., per project basis, per location fees, time, flat-fee per brand, etc.). For service providers that charge recurring fees based on the number of locations they are servicing, those expenses are allocated across the respective brand advertising funds on a pro-rata basis. For brand-specific marketing personnel (e.g., a Marketing Director), their salaries, wages, benefits and health insurance expenses are directly charged to the respective brand advertising fund(s) as an expense. For shared marketing personnel (e.g., Creative Director, Graphic Designers, Marketing Coordinators, Social Media Managers, Marketing Directors, Marketing Administrators, etc.), their salaries, wages, benefits, and health insurance expenses are allocated across the respective brand advertising funds based on the amount of time/work that they spend on each brand.
We spend the Fund's monies on costs of preparing and administering marketing activities for Restaurants on a local, regional or national basis (including television, radio, magazine, digital, podcast, newspaper, and other forms of advertising campaigns; direct mail and outdoor billboard advertising; marketing surveys; public relations activities; sponsorship of athletic and other events and activities; guest-service monitoring; location listings, email and other forms of consumer facing marketing; cost of online ordering; cost of marketing personnel; mobile marketing vehicles, promotional brochures and other marketing materials, including those used for soliciting franchise sales). At our option, we may use up to 15% of the Fund for advertising or promotion that is principally a solicitation for the sale of franchises. We are not obligated to spend any money on advertising any particular Restaurant or on advertising in your area or territory.
We plan to use all contributions to and earnings of the Fund on advertising/promotion during the same fiscal year that we receive the contributions and earnings. If excess amounts are in the Fund at the end of a fiscal year, we will spend the remaining funds in the following fiscal year(s), first out of accumulated earnings from previous years, next out of earnings in the current year, and then from contributions. We may spend in any year an amount greater than the aggregate contributions to the Fund, and may cause the Fund to borrow funds to cover deficits. If we or an affiliate advances money to the Fund, it will be entitled to be reimbursed for its advances plus interest.
Although the Fund is intended to exist as long as we offer franchises, we do have the right to terminate it. We will not terminate the Fund until all monies in the Fund have been spent on advertising/promotion, applied towards any funds that we may have decided to advance at a time when there were not sufficient amounts in the Fund for appropriate advertising activities, or returned to contributors on the basis of their respective contributions. (Franchise Agreement -Section 10.2)
Our affiliate-owned Restaurants also contribute to the Fund.
You may develop your own advertisements, including print, radio, television, coupons and internet ads, as well as direct mail for your own use, at your own cost. However, there are specific guidelines, including branding, creative direction, font type, logo design and redemption restrictions that must be adhered to. We may decline any advertisement that does not meet these guidelines. We must approve the advertising materials in advance and in writing. All marketing materials must be ordered through the designated printer.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 53–62)
What This Means (2025 FDD)
According to the 2025 Marble Slab Creamery FDD, FAT Brands utilizes both shared and dedicated marketing resources to support advertising initiatives across all its brands. These resources include Public Relations personnel, Graphic Designers, a Social Media Manager, and Advertising Agencies. The expenses for these resources are allocated equitably across the advertising funds of FAT-owned franchising companies based on metrics determined by FAT in its discretion, such as per-project basis, per-location fees, time, or a flat fee per brand. For recurring fees based on the number of locations, expenses are allocated pro-rata across the respective brand advertising funds. Salaries and benefits for brand-specific marketing personnel are directly charged to the respective brand advertising fund. For shared marketing personnel, costs are allocated based on the time spent on each brand.
FAT Brands spends the advertising fund's monies on preparing and administering marketing activities for Marble Slab Creamery restaurants on a local, regional, or national level. These activities include various forms of advertising campaigns such as television, radio, magazine, digital, podcast, and newspaper ads, as well as direct mail, outdoor billboard advertising, marketing surveys, public relations activities, and sponsorships. The funds also cover guest-service monitoring, location listings, email marketing, online ordering costs, marketing personnel costs, mobile marketing vehicles, and promotional brochures. FAT Brands has the option to use up to 15% of the fund for advertising or promotion that primarily solicits franchise sales. However, there is no obligation to spend money on advertising for any particular Marble Slab Creamery restaurant or in any specific area or territory.
Marble Slab Creamery franchisees are required to contribute to the national advertising fund. Franchisees must contribute 2% of total net sales weekly to the fund, in addition to the 2% of total net sales that must be spent on local advertising. Marble Slab Creamery reserves the right to increase the national advertising fund contribution up to 4% of net sales. For restaurants owned by Marble Slab Creamery or its affiliates, a contribution is made to the fund as if it were a franchised restaurant.
During the fiscal year ended December 31, 2024, Marble Slab Creamery allocated its advertising expenditures as follows: 43.7% on media placement, 9.5% on production, and 10.5% on the website. The remaining 36.3% was allocated to other areas, including a franchisee communications platform, guest experience programs, in-store music, a franchisee print portal, market research and product testing, marketing partnership funds, overhead, travel and administrative expenses, social media management software, PR monitoring, and other services. Marble Slab Creamery states that it has not used any marketing fund contributions for marketing that primarily solicits the sale of franchises.