If Red Wagon Club establishes a Brand Fund, how will franchisee contributions be payable?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
your other required marketing expenditures.
Brand Fund
We do not currently maintain, nor are we obligated to maintain, a systemwide advertising fund. However, we may elect to establish a Brand Fund to promote the awareness of the Red Wagon Club brand (the "Brand") and RWC Businesses generally. If we establish the Brand Fund, your contribution will be in amounts we periodically specify and will be payable in the same manner as the Program Fee; however, if we establish the Brand Fund, we have the right, at any time and on notice to you, to change the amount you must contribute to the Brand Fund, but we cannot increase the amount you must contribute to the Brand
Fund by more than 10% in any calendar year after we establish the Brand Fund. We anticipate that, if we establish the Brand Fund, y
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 24–31)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club Franchise Disclosure Document, if Red Wagon Club establishes a Brand Fund, franchisee contributions will be payable in the same manner as the Program Fee. The amount will be specified periodically by Red Wagon Club.
Red Wagon Club retains the right to modify the contribution amount to the Brand Fund, but they cannot increase it by more than 10% in any calendar year after the fund is established. The FDD anticipates that the initial Brand Fund contribution would be $500 per month if the Brand Fund is established.
It's important to note that Red Wagon Club is not obligated to ensure that Brand Fund expenditures are proportionate to contributions from RWC Businesses in any specific geographic area, nor are they obligated to ensure that any RWC Business benefits directly or proportionally to their contributions. Red Wagon Club also has the right to use collection agents and institute legal proceedings to collect Brand Fund contributions at the Brand Fund's expense.