What is the purpose of the Mr. Sandless Advertising Fund?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
must submit your grand opening advertising plan to us for our approval.
The Advertising Fund
We have established an advertising fund ("Advertising Fund") to promote the System, Mr. Sandless and the products and services offered by Mr. Sandless Businesses. You must contribute each month to the Advertising Fund an amount equal to 1% of your Gross Sales. Your contributions to the Advertising Fund are in addition to your local advertising requirement described above. The Advertising Fund will be used for national, regional and local advertising, publicity and promotion relating to our business. We will determine, in our fully unrestricted discretion, the manner in which the Advertising Fund will be spent. Some portion of the Advertising Fund may be used for creative concept production, seminars and training programs, market research, marketing surveys, services of advertising and/or public relations agencies, television, radio, magazine, social media, and newspaper and electronic advertising campaigns and related purposes, as well as for website development, enhancement and maintenance. We have the right to direct all advertising activities with sole discretion over creative concepts, materials and media used, as well as their placement and allocation.
We also have the right to determine, in our sole discretion, the composition of all geographic and market areas for the implementation of these advertising and promotional activities. The Advertising Fund is intended to maximize general public recognition in all media of the Proprietary Marks and patronage of Mr. Sandless
Businesses. We will use monies from the Advertising Fund to develop and prepare advertising which we will distribute to our franchisees for their placement in local media. Even though the Advertising Fund will prepare and distribute this advertising, every franchisee in the System may not derive the same or similar benefit from this advertising. We have no obligation to make sure that expenditures of the Advertising Fund in or affecting any geographic area are proportionate or equivalent to payments to the Advertising Fund by franchisees operating in that geographic area, or that any Business will benefit directly or in proportion to the Advertising Fees paid for the development of advertising and marketing materials or the placement of advertising. While we do not anticipate that any part of 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 our brand, for the creation and maintenance of a portion of our Website to be used to explain the franchise offering and solicit potential franchisees, and to include a notation in any advertisement indicating "Franchises Available."
We may periodically assist franchises to maintain high quality standards through customer surveys, customer interviews, and other similar initiatives ("Surveys"). The cost of these programs will be paid by the Advertising Fund; however, the cost of these programs may be charged directly to you if your results of a Survey fall below System established minimum standards for Surveys. Any fees charged to and paid by you will be contributed to the Advertising Fund.
We have the right to reimburse ourselves out of the Fund for the total costs (including indirect costs) of developing, producing and distributing any advertising materials and collecting the Advertising Fee (including attorneys', auditors' and accountants' fees and other expenses incurred in connection with collecting any Advertising Fee).
Businesses owned by us or our affiliates will contribute to the Fund on the same basis as you. The Fund will be kept separate and distinct and will be accounted for separately from our other funds. These funds will not be used to defray any of our general operating expenses, except as described in the paragraph above. Any sums paid to the Fund that are not spent in the year they are collected will carry over to the following year. We will prepare, and furnish to you upon written request, an annual, unaudited statement of funds collected and costs incurred. The Advertising Fund is not audited.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 19–25)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, the Advertising Fund is established to promote the Mr. Sandless system, brand, and the products and services offered by Mr. Sandless businesses. Franchisees are required to contribute 1% of their gross sales to this fund monthly, in addition to their local advertising obligations. This contribution is used for national, regional, and local advertising, publicity, and promotion related to the business.
Mr. Sandless has full discretion over how the Advertising Fund is spent, including creative concept production, seminars and training programs, market research, advertising agency services, and various advertising campaigns across television, radio, magazines, social media, newspapers, and electronic platforms. The fund also covers website development, enhancement, and maintenance. The aim is to maximize public recognition of Mr. Sandless's proprietary marks and encourage patronage of Mr. Sandless businesses.
Mr. Sandless may use the Advertising Fund for public relations, brand recognition, and to maintain a portion of their website for franchise recruitment. They can also reimburse themselves from the fund for costs related to developing and distributing advertising materials, as well as collecting the advertising fee, including legal and accounting expenses. Businesses owned by Mr. Sandless or its affiliates contribute to the fund on the same basis as franchisees. The fund is maintained separately from other funds, and any unspent amounts are carried over to the following year. Mr. Sandless provides an annual, unaudited statement of funds collected and costs incurred upon written request. In the most recent fiscal year ending December 31, 2024, 100% of the Advertising Fund was spent on online advertising on platforms like Google, YouTube, Yahoo, and Bing to generate customer leads for franchise owners.
While the Advertising Fund prepares and distributes advertising, there is no guarantee that every franchisee will receive the same benefit from it. Mr. Sandless is not obligated to ensure that advertising expenditures in any geographic area are proportionate to the payments made by franchisees in that area, or that any business will benefit directly in proportion to the advertising fees paid. This means that a franchisee's contribution to the Advertising Fund does not necessarily translate into direct or proportional advertising benefits in their specific location.