For Springhill Suites By Marriott, what activities are funded by the Marketing Fund?
Springhill_Suites_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Marketing Fund Contribution. Beginning on the Opening Date, Franchisee will pay Franchisor for each month an amount equal to the percentage of Gross Room Sales stated in Item 12.A of Exhibit A for such month, which Franchisor will use for the Marketing Fund Activities (the "Marketing Fund Contribution"). The Marketing Fund Contribution will be paid by Franchisee as part of the Program Services Contribution. Franchisor may (i) change the method of funding the Marketing Fund Activities (including by establishing methods of funding Marketing Fund Activities other than by the Marketing Fund Contribution or the Program Services Contribution); (ii) change the amount of the Marketing Fund Contribution, subject to Item 12.B of Exhibit A (without any obligation to make a corresponding change to the total Program Services Contribution); (iii) change the local, country, regional, continental or international scope of the Marketing Fund or the Marketing Fund Activities; (iv) merge or separate the Marketing Fund with marketing funds used to benefit other Franchisor Products; or (v) discontinue any Marketing Fund Activities, and Franchisee will be bound by any and all such changes.
E. No Fiduciary Duty. Franchisor and its Affiliates do not hold the Program Services Fund or the Marketing Fund as a trustee or as trust funds and have no fiduciary duty to Franchisee for such funds. The Program Services Contribution and Marketing Fund Contribution may be commingled with other money of Franchisor and its Affiliates and used to pay all costs, including administrative costs, salaries and overhead, and collection and accounting costs, incurred by Franchisor or any of its Affiliates for the Program Services Fund or Marketing Fund, respectively. Franchisor or its Affiliates may: (i) loan money for Program Services and Marketing Fund Activities and charge interest on any such loan; and (ii) use the Program Services Contribution or the Marketing Fund Contribution to repay any such loan plus interest. On request, Franchisor will provide to Franchisee a statement of operations presenting the revenues and expenses of the Program Services Fund and the Marketing Fund (which statement may be audited or unaudited in Franchisor's sole discretion) for any fiscal year of Franchisor if such request is made between 90 and 180 days after the end of such fiscal year.
Source: Item 23 — RECEIPTS (FDD pages 139–206)
What This Means (2025 FDD)
According to the 2025 Springhill Suites By Marriott FDD, the Marketing Fund Activities are supported by the Marketing Fund Contribution. Franchisees are required to pay a monthly contribution, calculated as a percentage of Gross Room Sales, as detailed in Item 12.A of Exhibit A. This contribution is specifically designated for Marketing Fund Activities.
Springhill Suites By Marriott retains considerable latitude over the Marketing Fund. The brand can modify how the Marketing Fund Activities are funded, potentially establishing alternative funding methods beyond the Marketing Fund Contribution or the Program Services Contribution. They can also adjust the Marketing Fund Contribution amount, as long as it aligns with Item 12.B of Exhibit A, without necessarily altering the total Program Services Contribution. Furthermore, Springhill Suites By Marriott can change the scope of the Marketing Fund or its Activities at the local, country, regional, continental, or international levels. They can also merge or separate the Marketing Fund with marketing funds benefiting other Marriott products or discontinue any Marketing Fund Activities altogether.
It is important to note that Springhill Suites By Marriott does not have a fiduciary duty to franchisees regarding the Marketing Fund. The Marketing Fund Contribution can be combined with other Marriott funds and used to cover various costs, including administrative expenses, salaries, overhead, and collection and accounting costs. Marriott can also loan money for Marketing Fund Activities and charge interest on such loans, using the Marketing Fund Contribution to repay these loans and interest. Franchisees are entitled to request a statement of operations for the Marketing Fund, which may be audited or unaudited, within a specific timeframe after the end of Marriott's fiscal year.