What is the definition of 'Ad Fund' as it relates to Moes Southwest Grill?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
**
Our Advertising. We are not obligated to conduct any advertising. We may periodically formulate, develop, produce, and conduct, at our sole discretion, advertising or promotional programs in such form and medium as we determine to be most effective. We may make available to you for you to purchase approved advertising and promotional materials, including signs, posters, collaterals, etc. that we have prepared.
Ad Fund. We will allocate your Advertising Contributions to a fund for the advertising and promotion of the Restaurants, the Proprietary Marks, and the System (the "Ad Fund"). Currently, you must make a monthly Advertising Contribution to the Ad Fund in the amount of 3% of Net Sales. We may, however, increase the Advertising Contribution up to 4% of Net Sales at any time by notice to franchisees. Your Advertising Contribution is in addition to your Local Marketing Obligation and your Grand Opening Obligation.
We currently do not, and are not required to, maintain the Ad Fund, Advertising Contribution you paid, or income earned from contributions to the Ad Fund in a separate account from our other money. Our Restaurants will contribute to the Ad Fund in the same manner and in the same amounts as similarly-situated franchised Restaurants. Our other franchisees may not be required to contribute to the Ad Fund, may be required to contribute to the Ad Fund at a different rate than you, or may be required to contribute to a different advertising fund.
We or an affiliate will administer the Ad Fund.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 53–68)
What This Means (2025 FDD)
According to the 2025 FDD, the Ad Fund for Moes Southwest Grill is a fund used for advertising and promotion of the Restaurants, Proprietary Marks, and the System. Franchisees are required to make monthly advertising contributions to the Ad Fund, which is currently 3% of Net Sales, but may be increased to 4% with notice. This contribution is in addition to the Local Marketing Obligation and Grand Opening Obligation.
The Ad Fund is administered by Moes Southwest Grill or an affiliate, who has sole authority to direct all advertising programs and promotions, including creative concepts, materials, media, and allocation of advertising. The company reserves the right to use any media, create any programs, and allocate advertising expenditures to any regions or locales they deem appropriate. Moes Southwest Grill's restaurants also contribute to the Ad Fund in the same manner and amounts as similarly-situated franchised restaurants.
The FDD specifies that Moes Southwest Grill is not obligated to ensure that advertising expenditures are proportionate to franchisee contributions or that individual restaurants will directly benefit from the advertising. While the company intends for the Ad Fund to be perpetual, it may be terminated after all contributions have been spent. Although there isn't an advertising council composed of franchisees involved in decision-making, a marketing subcommittee of the Franchise Advisory Council provides suggestions on advertising issues.