Does Pump It Up have sole discretion in using the Brand Fund monies?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
We have sole discretion to use the Brand Fund, and the monies in the Brand Fund, for any purpose that we believe will enhance and protect the System and Marks and will improve and increase public recognition and perception of the System and Marks. We will direct (or hire a third party to direct) all programs that the Brand Fund finances, with sole control over the creative concepts, materials, and endorsements used and their geographic, market, and media placement, allocation and coverage (which may be national, regional or local). Our in-house marketing department may prepare or work with advertising agencies to prepare the advertising materials for the Brand Fund.
Source: Item 11 — FRANCHISORS'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 30–41)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, Pump It Up has sole discretion regarding the use of the Brand Fund. The Brand Fund is used for the enhancement and protection of the Pump It Up system and its marks, as well as for the development of advertising, marketing, and public relations programs. Pump It Up maintains sole control over the creative concepts, materials, endorsements, and their placement. The in-house marketing department may prepare advertising materials or work with advertising agencies for the Brand Fund.
Pump It Up intends to use the Brand Fund to enhance recognition of the System and Marks among the public, franchisees, and employees. While the Brand Fund may be used for advertising and promotional materials, Pump It Up does not guarantee that expenditures will be proportionate to contributions from franchisees in any specific geographic area. Franchisees are not assured of directly benefiting from the Brand Fund in proportion to their contributions.
Pump It Up will account for the Brand Fund separately but is not required to segregate the monies. The Brand Fund will not be used for general operating expenses of Pump It Up. The company and its affiliates may be reimbursed for administrative expenses related to the Brand Fund's marketing programs. An annual, unaudited statement of the Brand Fund's collections and expenses will be prepared within 90 days after the fiscal year end and is available for review upon written request. Pump It Up does not have any fiduciary obligation to franchisees for administering the Brand Fund.
For a prospective franchisee, this means that while they are required to contribute to the Brand Fund, Pump It Up has complete control over how those funds are spent. There is no guarantee that the franchisee will see a direct benefit from these expenditures, and they have limited input into how the money is used. The franchisee can request to review the Brand Fund's financial statement to see how the money is being spent, but they have no power to influence those decisions.