Is the Spray Net advertising fund considered a trust?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees and acknowledges that the Fund is not a trust and the Franchisor has no fiduciary duty to Franchisee in administering the Fund.
- F. Franchise Advertising Council.
Franchisor may establish, if and when it deems appropriate in its sole discretion, a council to provide advice and guidance regarding the administration of the Fund and various other advertising/marketing matters (a "Franchise Advertising Council").
If Franchisor establishes a Franchise Advertising Counsel, it may serve in only an advisory capacity and may consist of franchisees, personnel from Franchisor's affiliate-owned Franchised Businesses, or other management/employees that Franchisor designates.
If a Franchise Advertising Council is established, the membership of such Franchise Advertising Council, along with the policies and procedures by which it operates, will be determined by Franchisor.
The recommendations of the Franchise Advertising Council shall not be binding on Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the advertising fund is not considered a trust, and Spray Net has no fiduciary duty to franchisees in administering the fund. This means that Spray Net has considerable discretion in how the advertising funds are managed and spent. While this provides Spray Net with flexibility, it also means franchisees have less direct control or legal recourse regarding the fund's management.
Spray Net may establish a Franchise Advertising Council to provide advice and guidance on the administration of the fund and other advertising/marketing matters. However, this council is purely advisory, and Spray Net is not obligated to follow its recommendations. The membership, policies, and procedures of the Franchise Advertising Council are determined by Spray Net.
Spray Net also retains control over the website presence for franchised businesses. While Spray Net may create an interior page on its corporate website to display information about a franchisee's business, franchisees cannot establish separate websites without prior written consent from Spray Net and must adhere to Spray Net's policies and standards if allowed to do so. This highlights the importance of franchisees understanding the degree of control Spray Net maintains over advertising and marketing initiatives and online presence.