Under what conditions can Monicals Pizza terminate the marketing fund?

According to Monicals Pizza's 2025 Franchise Disclosure Document, while the intent is for the marketing fund to be perpetual, Monicals Pizza retains the right to terminate it if necessary. However, Monicals Pizza is obligated to ensure that all contributions and earnings within the marketing fund are fully utilized for advertising and promotional activities before any termination can occur. Alternatively, any remaining funds must be returned to the franchisees on a pro rata basis, meaning each franchisee receives a portion proportional to their contribution.

This condition protects franchisees by ensuring that their contributions to the marketing fund are either used for their intended purpose—to promote the Monicals Pizza brand and drive business—or are returned to them equitably. It prevents Monicals Pizza from simply dissolving the fund and retaining the remaining assets without proper allocation.

It's important to note that Monicals Pizza emphasizes that the marketing fund is not a trust and that they assume no fiduciary duty in administering it. While they are obligated to use the funds for advertising or return them to franchisees, the absence of a fiduciary duty may give Monicals Pizza more discretion in how the funds are managed and spent, as long as it aligns with the stated purpose of advertising and promotion. A prospective franchisee should seek clarification on how the fund is managed and what specific controls are in place to ensure transparency and accountability.