CO-OP FUND POLICY TEMPLATE

This template provides a complete structural framework for a franchise co-op marketing fund policy. Sections in [brackets] should be customised to your brand. This document should be reviewed by your franchise counsel before distribution to franchisees, as it may interact with your Franchise Disclosure Document (FDD) and franchise agreement.

The policy should be incorporated by reference into your franchise agreement and updated annually, with any material changes communicated to franchisees in writing with a minimum of 90 days notice.

[BRAND NAME] National Marketing Fund Policy

1.1 Purpose The [Brand Name] National Marketing Fund (the "Fund") exists to pool franchisee marketing contributions for the purpose of building brand awareness, driving consumer traffic, and producing marketing materials that benefit the entire franchise network.

1.2 Administration The Fund is administered by [Brand Name] Corp. (the "Franchisor"). The Franchisor maintains fiduciary responsibility over Fund assets and is accountable for reporting fund allocation and performance to franchisees annually.

1.3 Contribution Rate Each franchisee shall contribute [X]% of weekly gross sales to the Fund, payable [weekly/monthly] by [payment method]. Contribution rates may be adjusted by the Franchisor with [90 days] written notice.

2.1 Approved Uses Fund assets may be used for the following purposes: - National and regional advertising across digital, broadcast, and out-of-home channels - Production of brand-approved marketing creative and content - Digital marketing platform fees and technology costs - Grand opening support programs for new franchise locations - Marketing research and consumer insights - Franchisee marketing training and education

2.2 Excluded Expenditures The following may not be funded from the National Marketing Fund: - Location-specific promotions that do not benefit the broader network - Franchisor administrative overhead (salaries, facilities, general operations) - Charitable donations or sponsorships not approved by the Fund committee - Any expenditure not pre-approved through the Fund approval process

3.1 Marketing Committee A Marketing Advisory Committee composed of [X] franchisee representatives and [X] Franchisor representatives shall provide input on the annual marketing plan and Fund budget allocation. The Committee is advisory; final decisions rest with the Franchisor.

3.2 Annual Budget The Franchisor shall present an annual marketing budget to the Marketing Advisory Committee no later than [November 30] of each calendar year for the following fiscal year. The budget shall include channel allocation, production budget, and anticipated campaign calendar.

3.3 Franchisee-Initiated Spend Franchisees may request Fund support for locally-initiated marketing programs through the Fund approval process. Requests must be submitted using the approved request form with a minimum of [21 days] advance notice. Approval requires sign-off from the Marketing Director and is at the Franchisor's sole discretion.

4.1 Quarterly Reporting The Franchisor shall provide franchisees with quarterly reports including: total contributions received, total expenditures by category, campaign performance summary, and Fund reserve balance.

4.2 Annual Audit The Fund shall be subject to an annual independent audit by a chartered professional accountant. Audit results shall be made available to all franchisees within [120 days] of fiscal year end.

4.3 Record Retention All Fund financial records shall be retained for a minimum of [7] years and shall be available for inspection by any franchisee upon [30 days] written request.

4.4 Fund Surplus Any Fund surplus at fiscal year end shall be carried forward to the following year's Fund budget. The Franchisor shall not derive profit from the Fund.

5.1 Policy Amendments This policy may be amended by the Franchisor with [90 days] written notice to all active franchisees. Material amendments — defined as changes to contribution rates, eligible expenditure categories, or governance structure — require ratification by a simple majority of the Marketing Advisory Committee before taking effect.

5.2 Emergency Provisions In the event of a brand crisis, competitive emergency, or other situation requiring immediate marketing response, the Franchisor may authorise Fund expenditures without the standard approval process. Any such expenditures shall be disclosed in the next quarterly report.

5.3 Policy Effective Date This policy supersedes all previous co-op fund policies and is effective as of [DATE].

---

*This template is provided for informational purposes. It does not constitute legal advice. Consult qualified franchise counsel before implementing any co-op fund policy.*