Does the National Advertising Fund and its earnings inure to the benefit of Punch King Fitness?

According to Punch King Fitness's 2024 Franchise Disclosure Document, the National Advertising Fund and its earnings do not inure to the benefit of Punch King Fitness. The funds are intended to maximize public recognition of the Punch King Fitness marks for the benefit of all franchisees.

Franchisee contributions are made separately via transactions payable to the Punch King Fitness National Advertising Fund. These funds are not used to defray Punch King Fitness's expenses, except for reasonable salaries, overhead, administrative, accounting, and legal costs related to the administration of the National Advertising Fund or advertising programs. This also includes the costs of enforcing contributions and preparing statements of operations.

All contributions to and earnings of the National Advertising Fund are anticipated to be spent on advertising and promotional purposes during the taxable year they are made. If excess amounts remain at the end of the year, expenditures in the following years will first be made from accumulated earnings, then from current year earnings, and finally from contributions. Punch King Fitness (and any designee) has no direct or indirect liability to the franchisee or the National Advertising Fund regarding the management, maintenance, or administration of the fund. Punch King Fitness is not liable for any act or omission consistent with the agreement or done in good faith.

As a franchisee, you contribute 2% of gross revenues monthly to the National Advertising Fund. While the fund aims to benefit all franchisees, Punch King Fitness is not obligated to ensure that expenditures are equivalent or proportionate to your contribution or that your specific franchise benefits directly or pro-rata from advertising placements. The fund covers costs related to advertising campaigns, direct mail, billboard advertising, marketing surveys, public relations, advertising agencies, product development, and promotional materials.