Will the Red Wagon Club Brand Fund be used primarily to sell franchises?

According to Red Wagon Club's 2024 Franchise Disclosure Document, the Brand Fund will not be used primarily to sell franchises. While marketing materials may reference the availability of franchises, the primary purpose of the Brand Fund is to promote the awareness of the Red Wagon Club brand and RWC Businesses in general.

The Brand Fund, if established, will be used to pay for various marketing and advertising activities. These activities include administrating online advertising strategies, maintaining a system website and mobile apps, administering regional and multi-regional marketing programs, implementing gift and loyalty programs, and supporting public relations, market research, product development, and other marketing activities. The franchisor has sole control over the creative concepts, materials, and endorsements used, as well as their geographic, market, and media placement and allocation.

Red Wagon Club is not required to segregate Brand Fund contributions from other funds but will account for them separately and not use them for general operating expenses. However, the Brand Fund can be used to reimburse the franchisor or its affiliates for reasonable salaries, benefits, administrative costs, travel expenses, meeting costs, and overhead related to administering the Brand Fund and its programs. This means that while the fund isn't for general operations, it can cover expenses directly tied to managing the fund itself.

Prospective franchisees should note that Red Wagon Club does not assume any fiduciary obligation regarding the Brand Fund contributions or its administration. The franchisor will hold all Brand Fund contributions for the benefit of the contributors and may spend more or less than the total contributions in any fiscal year, borrow to cover deficits, or invest any surplus for future use. An annual, unaudited statement of Brand Fund collections and expenses will be provided to franchisees upon written request, and the Brand Fund may be audited annually at its expense.