Can Pump It Up use the Brand Fund for its general operating expenses?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
We will not use the Brand Fund for any of our general operating expenses.
We and our affiliates may be reimbursed by the Brand Fund for administrative expenses directly related to the Brand Fund's marketing programs, including without limitation, conducting market research, preparing advertising and marketing materials, and collecting and accounting for contributions to the Brand Fund.
We may use the Brand Fund to pay the administrative costs of the Brand Fund including managing the advertising, marketing, and promotional programs and payment of outside vendors utilized by the Brand Fund.
We may use the Brand Fund to pay the reasonable salaries and benefits of personnel (including our personnel and our affiliates' personnel) who manage and administer the Brand Fund.
We may use the Brand Fund to pay for other administrative costs, travel expenses of personnel while they are on Brand Fund business, meeting costs, overhead relating to Brand Fund business, and other expenses that we incur in activities reasonably related to administering or directing the Brand Fund and its programs.
- (4) The Brand Fund is not our asset.
Although the Brand Fund is not a trust, we will hold all Brand Fund contributions for the benefit of the System and use contributions only for the purposes described in this Section 9.B.
We do not owe any fiduciary obligation to you for administering the Brand Fund or for any other reason.
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to the 2025 Pump It Up Franchise Disclosure Document, Pump It Up will not use the Brand Fund for any of its general operating expenses. However, Pump It Up and its affiliates may be reimbursed from the Brand Fund for administrative costs that are directly related to the Brand Fund's marketing programs. These expenses can include conducting market research, preparing advertising and marketing materials, and collecting and accounting for contributions to the Brand Fund.
Pump It Up may also use the Brand Fund to cover the administrative costs of the fund itself, including managing advertising, marketing, and promotional programs, and paying outside vendors. The Brand Fund can also be used to pay the salaries and benefits of personnel (including Pump It Up's personnel and its affiliates' personnel) who manage and administer the Brand Fund. Other permissible uses of the Brand Fund include covering other administrative costs, travel expenses for personnel on Brand Fund business, meeting costs, overhead related to Brand Fund business, and other expenses reasonably related to administering or directing the Brand Fund and its programs.
Pump It Up emphasizes that the Brand Fund is not its asset, and while it's not a trust, Pump It Up will hold all Brand Fund contributions for the benefit of the Pump It Up system, using contributions only for the specified purposes. While Pump It Up does not owe any fiduciary obligation to franchisees for administering the Brand Fund, this commitment to not using the fund for general operating expenses provides some assurance that contributions will be used for the intended marketing and promotional activities. Franchisees should still carefully review the categories of expenses that are permitted to be paid from the Brand Fund to ensure they align with their expectations for how their contributions will be used to support the Pump It Up brand.