Under what conditions would a Red Wagon Club franchisee be required to contribute to the Brand Fund?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Brand Fund Contribution | Not currently assessed | If assessed, monthly, the 10th of each month | We may, but are not obligated to, establish an advertising fund to be used to promote the awareness of the Red Wagon Club brand and RWC Businesses generally (the "Brand Fund"). If we establish the Brand Fund, upon notice to you, you agree to contribute to the Marketing Fund. We anticipate that the Brand Fund contribution would be $500 per month. If we impose this fee, we may further increase the Brand Fund Contribution by up to 10% annually during the term of the Franchise Agreement. |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, a franchisee is not currently required to contribute to the Brand Fund. However, Red Wagon Club may choose to establish an advertising fund, known as the "Brand Fund", to promote brand awareness and Red Wagon Club businesses in general.
If Red Wagon Club establishes the Brand Fund, they will notify franchisees, who will then be required to contribute. The FDD anticipates that the Brand Fund contribution would be $500 per month. This contribution would be due monthly, on the 10th of each month.
Furthermore, Red Wagon Club retains the right to increase the Brand Fund contribution by up to 10% annually during the term of the Franchise Agreement, should they decide to implement the fee. Franchisees should be prepared for this potential expense and factor it into their financial planning.