Is the MAP Fund for Precision Door Service considered a trust or escrow account?
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 Precision Door Service's 2025 Franchise Disclosure Document, the MAP (Marketing, Advertising and Promotion) Fund is not a trust or escrow account. The document specifies that neither Precision Door Service nor the Manager (Neighborly Company) has any fiduciary obligations regarding the MAP Fund. This means the fund is not legally required to be managed in the franchisees' best interests in the same way a trust or escrow account would be.
Instead, the Manager has broad discretion over how the MAP Fund is used. The funds can be allocated for various marketing and advertising purposes related to the Precision Garage Door Service franchise system. These include broadcast, print, and digital advertising, creation of promotional materials, marketing research and development, and administrative expenses. The Manager also has the authority to use the fund for developing marketing tools and platforms and for compensating employees or entities involved in administering the fund.
If the MAP Fund has remaining amounts at the end of the fiscal year, these amounts are retained for use in subsequent years rather than being distributed back to franchisees. Precision Door Service also reserves the right to incorporate the MAP Fund or operate it through a separate entity in the future, and this successor entity would assume all rights and duties related to the fund. In the event of termination of the MAP Fund, franchisees would receive a pro-rata portion of any remaining amounts based on their contributions. This arrangement gives Precision Door Service significant control over the MAP Fund and its usage, without the legal constraints associated with a trust or escrow account.