Does Precision Door Service have a fiduciary obligation to franchisees with respect to the MAP Fund?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
A. MAP Fund. If and when we begin to collect MAP Fees as provided in Section 8.D, we reserve the right to establish and manage a Marketing, Advertising and Promotion Fund for PRECISION GARAGE DOOR SERVICE® Businesses (the "MAP Fund") and deposit all MAP Fees you pay to us hereunder in the MAP Fund. On behalf of our company and affiliateowned PRECISION GARAGE DOOR SERVICE® Businesses, we will pay the same MAP Fee as similarly situated franchised PRECISION GARAGE DOOR SERVICE® Businesses. The MAP Fund will not be a trust or escrow account, and we will have no fiduciary obligation to franchisees with respect to it. We will have the right to make disbursements from the MAP Fund for expenses incurred in connection with the cost of formulating, developing, implementing and administering marketing, advertising, public relations, and promotional campaigns. The disbursements may include payments to us for the expense of administering the MAP Fund, including accounting expenses and salaries and benefits paid to our employees engaged in the administration and operation of the MAP Fund or otherwise providing services with respect to the MAP Fund. We will have the right to determine the methods of marketing, advertising, media employed and contents, terms and conditions of marketing campaigns and promotional programs. Because of the methods used, we will not be required to spend a prorated amount on each PRECISION GARAGE DOOR SERVICE® Business or in each advertising market. We, as the administrator of the MAP Fund, will have the right to collaborate with the administrators of advertising funds of certain other franchise systems affiliated with us. You acknowledge that there can be no assurance that the MAP Fund's participation in these collaborations and joint efforts will benefit PRECISION GARAGE DOOR SERVICE® Businesses proportionately or equivalently to the benefits received by any other franchised businesses of the other participating affiliated franchise systems.
Source: Item 22 — Contracts (FDD pages 91–92)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, Precision Door Service does not have a fiduciary obligation to franchisees regarding the Marketing, Advertising, and Promotion (MAP) Fund. The FDD explicitly states that the MAP Fund will not be a trust or escrow account, and Precision Door Service will not have a fiduciary duty to franchisees concerning the fund. This means that while Precision Door Service manages the MAP Fund, it is not legally bound to act solely in the best financial interests of the franchisees in its administration.
Precision Door Service has the right to make disbursements from the MAP Fund for expenses related to marketing, advertising, public relations, and promotional campaigns. These disbursements can include payments to Precision Door Service for administering the fund, covering accounting expenses, and compensating employees involved in the fund's operation. Precision Door Service also has the authority to determine the marketing methods, advertising channels, and the content of marketing campaigns and promotional programs. This discretion allows Precision Door Service to make decisions about how the MAP Fund is spent without necessarily ensuring that each franchise benefits proportionally.
Franchisees should recognize that Precision Door Service, as the administrator of the MAP Fund, may collaborate with advertising funds of affiliated franchise systems. The FDD acknowledges that there is no guarantee that Precision Door Service businesses will benefit proportionately or equivalently from these collaborations compared to other participating affiliated franchise systems. While Precision Door Service will provide an annual unaudited statement of the MAP Fund's financial condition if requested, franchisees bear the risk that the fund's management and collaborative efforts may not equally benefit all franchisees.