Will Punch King Fitness or its affiliates receive any payment from the National Advertising Fund, other than what is disclosed?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
You are obligated to contribute up to 2% of Gross Revenues to the Punch King Fitness National Advertising Fund. Contributions to the Punch King Fitness National Advertising Fund may be used for in-house, national or regional agencies to maintain, administer, research, direct, and prepare advertising and/or promotional activities, including, without limitation, the costs of preparing and conducting advertising campaigns, which may be local, regional or national, in various media; direct mail and outdoor billboard advertising; marketing surveys and other public relations activities; employing advertising agencies to assist therein; product development; and developing and providing promotional and other marketing materials for franchisees in the System. We may be reimbursed for any labor or services we provide to the fund and for any costs we incur for or on behalf of the National Advertising Fund for any labor or services that we provide to the fund and for any costs that we incur for or on behalf of the National Advertising Fund. We may loan the National Advertising Fund additional funds if needed. For each company-owned location (if any), we will contribute to the National Advertising Fund on the same basis as assessments required of comparable franchises within the System. Franchisees who contribute to the fund may obtain a copy of the fund's unaudited financial statements after April 30th of each year upon your written request. Except as disclosed above, neither we nor any affiliate of ours will receive any payment from the fund. We do not use National Advertising Fund dollars to solicit new franchise sales. (Sections IV of the Franchise Agreement).
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 28–35)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, neither Punch King Fitness nor its affiliates will receive payments from the National Advertising Fund beyond what is already disclosed in the document. Punch King Fitness franchisees are required to contribute up to 2% of gross revenues to the National Advertising Fund. These contributions can be used by Punch King Fitness for various advertising and promotional activities, including preparing advertising campaigns, direct mail, billboard advertising, marketing surveys, public relations, and product development. Punch King Fitness may also use the funds to employ advertising agencies and develop marketing materials for franchisees.
Punch King Fitness is allowed to be reimbursed from the National Advertising Fund for labor, services, and costs incurred on behalf of the fund. Additionally, Punch King Fitness may loan additional funds to the National Advertising Fund if needed. For company-owned locations, Punch King Fitness will contribute to the fund on the same basis as required of comparable franchises within the system. Franchisees are entitled to a copy of the fund's unaudited financial statements after April 30th each year upon written request.
The National Advertising Fund aims to maximize public recognition of the Punch King Fitness brand for the benefit of all franchisees. However, Punch King Fitness is not obligated to spend any specific amount of money in a franchisee's territory or ensure that the benefits are proportionate to the contributions made to the fund. In 2023, the National Advertising Fund did not collect any contributions. Any excess amounts remaining in the fund at the end of the year will be retained and used for expenditures in subsequent years, starting with accumulated earnings, then current-year earnings, and finally from contributions.