Can Mr. Sandless reimburse itself from the Advertising Fund contributions?

According to Mr. Sandless's 2025 Franchise Disclosure Document, Mr. Sandless has the right to reimburse itself from the Advertising Fund contributions. Specifically, Mr. Sandless can cover reasonable costs and overhead incurred while directing and implementing the Advertising Fund. This means that a portion of the 1% of gross sales that franchisees contribute to the Advertising Fund may be used to compensate Mr. Sandless for its administrative efforts related to the fund.

This arrangement is fairly common in franchising, where franchisors often manage advertising funds and are permitted to use a portion of the funds to cover their administrative expenses. However, it's important for prospective franchisees to understand the extent to which Mr. Sandless can reimburse itself, as this directly impacts the amount of funds available for actual advertising and marketing activities.

Mr. Sandless is required to provide an annual statement of contributions and expenditures for the Advertising Fund within 60 days of the fiscal year's end, which is available to franchisees upon written request. While the Advertising Fund is not required to be independently audited, this statement should provide some transparency regarding how the funds are being used, including any reimbursements taken by Mr. Sandless. Franchisees should carefully review these statements to ensure that reimbursements are reasonable and in line with industry standards.