Are payments received by Mr. Sandless from suppliers for the benefit of the franchisee?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the sole right to determine contributions and expenditures from the Advertising Fund, or any other advertising program, and sole authority to determine, without limitation, the selection of the advertising materials and programs; provided, however, that we will make a good faith effort to expend Advertising Fund contributions in the general best interests of the System on a national or regional basis.
We may use the Advertising Fund to satisfy any and all costs of maintaining, administering, directing, preparing, and producing advertising, including the cost of preparing and producing television, radio, magazine, social media, newspaper and electronic advertising campaigns, direct mail and outdoor billboard advertising; public relations activities conducting marketing research, employing advertising agencies to assist therein; developing, enhancing and maintaining the Website; and personnel and other departmental costs for advertising that we internally administer or prepare.
Nevertheless, you acknowledge that neither you nor any other System franchisees will benefit directly or on a pro rata basis from such expenditures.
While we do not anticipate that any part of the Advertising Fund contributions will be used for advertising which is principally a solicitation for franchisees, we reserve the right to use the Advertising Fund for public relations or recognition of the Mr.
Sandless brand, for the creation and maintenance of a Website, a portion of which can be used to explain the franchise offering and solicit potential franchisees, and to include a notation in any advertisement indicating "Franchises Available."
- 13.5.2 We may periodically assist franchises to maintain high quality standards through customer surveys, customer interviews, and other similar initiatives ("Surveys").
The cost of such programs will be borne by the Advertising Fund.
The cost of these programs may be charged directly to you if your results of a Survey fall below System established minimum standards for such Surveys.
Any such fees charged will be contributed to the Advertising Fund.
- 13.5.3 We have the right to reimburse ourselves from the Advertising Fund contributions for such reasonable costs and overhead, if any, as we may incur in activities reasonably related to the direction and implementation of the Advertising Fund.
Any monies remaining in the Advertising Fund at the end of any fiscal year shall carry forward to the next fiscal year.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
Based on the 2025 Mr. Sandless Franchise Disclosure Document, the franchisor has an Advertising Fund, and while it does not explicitly state that payments from suppliers are directed into this fund, it does outline how the fund is used and who benefits. Mr. Sandless has sole discretion over the Advertising Fund, and they make a good faith effort to expend contributions in the general best interest of the system on a national or regional basis.
The Advertising Fund can be used for various advertising-related costs, including television, radio, magazine, social media, newspaper, and electronic advertising campaigns, direct mail, outdoor billboard advertising, public relations activities, marketing research, employing advertising agencies, developing, enhancing, and maintaining the website, and personnel and other departmental costs for advertising that Mr. Sandless internally administers or prepares.
However, the FDD states that neither the franchisee nor any other system franchisees will benefit directly or on a pro rata basis from such expenditures. The fund may also be used for public relations or recognition of the Mr. Sandless brand, creation and maintenance of a website, and to solicit potential franchisees. The Advertising Fund may also cover the costs of customer surveys and similar initiatives to maintain high-quality standards, but if a franchisee's survey results fall below system-established minimum standards, the cost of these programs may be charged directly to the franchisee, with any such fees contributed back to the Advertising Fund.
Mr. Sandless has the right to reimburse themselves from the Advertising Fund contributions for reasonable costs and overhead incurred in activities related to the direction and implementation of the Advertising Fund. Any monies remaining in the Advertising Fund at the end of any fiscal year will carry forward to the next fiscal year.