Who has the sole right to determine contributions and expenditures from the Mr. Sandless Advertising Fund?
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."
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, Mr. Sandless Franchise LLC has the sole right to determine contributions and expenditures from the Advertising Fund. This fund is used for system-wide advertising to benefit all franchisees. Franchisees are required to contribute monthly to the Advertising Fund, with the amount equal to one percent (1%) of their Gross Sales. Any Mr. Sandless businesses owned by the company or its affiliates will contribute to the Advertising Fund on the same basis as franchisees.
Mr. Sandless has the authority to select advertising materials and programs, and 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. The fund can be used for various advertising costs, including television, radio, magazine, social media, newspaper, and electronic advertising campaigns, as well as public relations activities, marketing research, website maintenance, and personnel costs for advertising.
While franchisees contribute to the Advertising Fund, they may not directly benefit from specific expenditures on a pro rata basis. Mr. Sandless may use the Advertising Fund for public relations, brand recognition, website creation, and even to solicit potential franchisees. The company will provide an annual statement of contributions and expenditures for the Advertising Fund within 60 days of the fiscal year's end, available upon written request. The Advertising Fund is not required to be independently audited.
This arrangement is typical in many franchise systems, where a franchisor manages a centralized advertising fund to promote the brand as a whole. However, it's important for prospective Mr. Sandless franchisees to understand that they do not have direct control over how these funds are spent and that the franchisor has broad discretion in allocating the advertising budget.