| name | ad-fund-agreement |
| title | Advertising Fund Contribution Agreement |
| description | Drafts franchise advertising fund contribution agreements or addenda governing franchisee obligations to a centralized marketing fund. Trigger when drafting ad fund agreements, marketing fund addenda, or franchise contribution agreements involving fund administration, contribution calculations, or financial reporting. |
| author | CaseMark |
| author_url | https://github.com/CaseMark/skills/tree/main/skills/legal/ad-fund-agreement |
| license | Apache-2.0 |
| version | 0.1.0 |
| execution_mode | open |
| jurisdiction | us |
| practice | commercial |
| language | en |
| tags | ["agreement","drafting","transactional"] |
Advertising Fund Contribution Agreement
Drafts a franchise advertising fund agreement or addendum establishing contribution obligations, fund administration, and transparency provisions that minimize disputes.
Prerequisites
- Franchise Agreement — executed copy with date, amendment numbers, notice clauses, defined terms (especially "Gross Sales")
- Fund structure — standalone vs. addendum; national vs. regional; separate account vs. accounting mechanism
- Contribution rate — percentage of Gross Sales, payment frequency, remittance method (typically EFT aligned with royalty schedule)
- State franchise law — jurisdiction-specific disclosure obligations, separate-account mandates, reporting requirements
- FDD language — current Item 6 and Item 7 advertising fund disclosures for consistency
Document Sections
| # | Section | Key Content |
|---|
| 1 | Header & Parties | Title, legal names, effective date, reference to underlying Franchise Agreement, incorporation language |
| 2 | Recitals | Fund business purpose, mutual benefit acknowledgment, obligation commencement date |
| 3 | Fund Establishment | Scope (national/regional/system-wide), legal structure, stated purpose |
| 4 | Contribution Obligation | Gross Sales percentage, Gross Sales definition, payment frequency/due dates, remittance method, late-payment consequences |
| 5 | Fund Administration | Franchisor discretion, non-fiduciary disclaimer, enumerated permissible uses, rate/structure modification with notice, carry-forward and borrowing |
| 6 | Franchisee Rights & Limitations | No proportional-benefit or geographic-targeting guarantee, separation from local ad obligations, franchisor approval over local ads, limited audit rights |
| 7 | Financial Reporting | Annual minimum reporting (receipts, disbursements by category, ending balance), audit provisions, FDD integration, surplus/deficit treatment |
| 8 | Term & Termination | Coterminous with franchise agreement, modification notice periods, post-termination payment obligations, surviving provisions, fund dissolution |
| 9 | Legal Compliance | Authority representations, state franchise law compliance, FDD consistency, governing law, dispute resolution, integration clause |
