How does a Marble Slab Creamery franchisee contribute to the national advertising fund?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will make a weekly contribution to a fund for national/regional advertising of the System (the "Fund") in an amount equal to the NAF Percentage multiplied by Franchisee's total Net Sales during the applicable period. Franchisor reserves the right in its absolute discretion to increase said dollar amount and percentage rate at any time throughout the term of this agreement to four percent (4%), respectively. Franchisor reserves the right, in its sole discretion, to authorize some but not all franchisees, which may or may not include Franchisee, to withhold all or a portion of its or their required contribution to the Fund, as Franchisor may determine in its sole discretion. Upon receipt of Franchisor's prior written approval, which Franchisor may subsequently modify or withdraw at any time upon 30 days written notice, Franchisee may withhold from its Fund contribution a dollar amount or percentage specified by Franchisor, in its sole discretion, provided that Franchisee must spend the dollar amount or percentage withheld on local advertising in accordance in Section 10.1.4. Such local advertising may, at Franchisor's option, be in lieu of or in addition to the local advertising required pursuant to Section 10.1.1. If Franchisor subsequently withdraws its approval of such withholding program, at the end of the 30 day notice period, Franchisee must immediately cease withholding any amounts from the Fund and must remit the full 2% of weekly Net Sales to the Fund. The Fund will be maintained and administered by Franchisor or its designee, as follows:
- 10.2.1 Franchisor or its designee will direct all marketing programs with sole discretion over the concepts, materials, and media used in such programs and the placement and allocation thereof, including on a national, regional or local basis, as Franchisor may determine in its sole discretion. Franchisee and Franchisor agree and acknowledge that the Fund is intended to increase the general public recognition, acceptance, the use of the Proprietary Marks for the System, and for other purposes permitted hereunder. Franchisor or its designee undertake no obligation in administering the Fund to make expenditures for Franchisee which are equivalent or proportionate to Franchisee's contribution or to insure that any particular Franchisee benefits directly or pro rata from expenditures by the Fund.
- 10.2.2 Franchisor will, for each of its company-owned Marble Slab Creamery restaurants, if any, make contributions to the Fund on the same basis as assessments required of comparable franchisees within the System.
- 10.2.3 The Fund, all contributions thereto, and any earnings thereon will be used exclusively to reimburse Franchisor for advances relating to, and/or to meet any and all future costs of maintaining, administering, directing, and preparing advertising and/or promotional activities (including, among other things, the cost of preparing and conducting television, radio, magazine, and newspaper advertising campaigns; direct mail and outdoor billboard advertising; marketing surveys and other public relations activities; sponsorship of athletic and other events and activities; soliciting franchisee sales; use of advertising agencies to assist therein; and promotional brochures and other marketing materials for restaurants operated under the System). Without limiting the foregoing, Franchisor may, at its option, use up to 15% of the contributions to the Fund for soliciting franchise sales.
- 10.2.4 Franchisee will contribute to the Fund by separate check (or EFT payment) made payable to the Fund, or in the manners provided in Section 4.6. All sums paid by Franchisee to the Fund will be maintained in an account separate from the other monies of Franchisor and will not be used to defray any of Franchisor's expenses, except for such reasonable administrative costs
Source: Item 22 — CONTRACTS (FDD page 101)
What This Means (2025 FDD)
According to Marble Slab Creamery's 2025 Franchise Disclosure Document, franchisees are required to make weekly contributions to the national advertising fund, referred to as the "Fund." The standard contribution is calculated by multiplying the "NAF Percentage" by the franchisee's total Net Sales during the applicable period. The initial NAF Percentage is 2%, but Marble Slab Creamery retains the right to increase this up to 4% at any point during the agreement term. These contributions are specifically for national and regional advertising efforts.
Marble Slab Creamery maintains considerable discretion over the Fund. They can authorize some franchisees to withhold a portion or all of their required contribution, potentially allowing those franchisees to focus on local advertising initiatives. This withholding is subject to Marble Slab Creamery's prior written approval, which they can modify or withdraw with 30 days' notice. If a franchisee is allowed to withhold funds, they must spend the withheld amount on local advertising as per the guidelines set out in Section 10.1.4 of the franchise agreement.
The funds collected are to be used exclusively for advertising and promotional activities, including television, radio, magazine, and newspaper campaigns, direct mail, billboard advertising, marketing surveys, public relations, event sponsorships, and promotional materials. Marble Slab Creamery also has the option to use up to 15% of the contributions to the Fund for soliciting franchise sales. All franchisee contributions are kept in a separate account and are not used for the franchisor's expenses, except for reasonable administrative costs.