Does Precision Door Service or the Manager have any fiduciary obligations with respect to the MAP Fund?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
We collect a MAP Fee from you for the MAP Fund equal to 2% of monthly Gross Sales, as provided in Item 6. (Franchise Agreement, Section 8.C)
We have established the MAP fund and have designated the Manager (i.e., Neighborly Company) to administer the MAP Fund. The MAP Fund is not a trust or escrow account, and neither we nor the Manager will have any fiduciary obligations with respect to the MAP Fund. If all of the MAP Fees are not spent in the fiscal year in which they accrue, the remaining amounts will be retained in the MAP Fund for use in the following years. The Manager may use the MAP Fund for various purposes related to the Precision Garage Door Service® franchise system, including, but not limited to, (1) broadcast, print or digital advertising; (2) the creation, development and production of advertising and promotional materials (i.e., print ads, digital, radio, film and television commercials, video, digital ads, direct mail pieces, and
other print advertising); (3) any marketing or related research and development; (4) advertising and marketing expenses, including product research and development, services provided by advertising agencies, public relations firms or other marketing, research or consulting firms or agencies; (5) the development, licensing and/or use of any tools and platforms in connection with marketing, advertising and promotional activities; and (6) expenses, administrative costs and overhead we or the Manager may incur in activities related to maintaining, administering, directing, and conducting the MAP Fund and its programs, including compensation to employees or any other individual or entity providing services to the MAP Fund. (Franchise Agreement, Section 7.A)
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 50–63)
What This Means (2025 FDD)
According to the 2025 Precision Door Service FDD, neither Precision Door Service nor the Manager (Neighborly Company) has any fiduciary obligations with respect to the MAP Fund. The MAP Fund, which franchisees contribute to via a MAP Fee equal to 2% of monthly Gross Sales, is not a trust or escrow account. This means that Precision Door Service and Neighborly Company are not legally bound to act in the best interests of the franchisees when managing the fund.
The Manager has discretion over how the MAP Fund is used, including broadcast, print, or digital advertising; creation of promotional materials; marketing research and development; and administrative expenses. The Manager is not required to spend any specific amount on marketing in the franchisee's local area. The Manager will provide an annual unaudited accounting of the MAP Fund available for review upon written request.
Precision Door Service may contribute to the MAP Fund amounts equal to the franchisee's required percentage for company-owned and affiliate-owned Precision Garage Door Service businesses. They may also contribute amounts paid to them by outside suppliers. Precision Door Service reserves the right to incorporate the MAP Fund or operate it through another entity and may use collection agents or legal proceedings to collect MAP Fund contributions. If the MAP Fund is terminated, franchisees will receive a pro-rata portion of the remaining funds based on their contributions.
This arrangement carries potential risks for franchisees, as the fund's management is not legally obligated to prioritize their interests. While an annual accounting is provided, the lack of fiduciary duty means franchisees have limited recourse if they disagree with how the funds are spent. Prospective franchisees should carefully consider this aspect and seek clarification from Precision Door Service regarding the governance and decision-making processes of the MAP Fund.