Franchise Marketing Funds in Ireland: Plan the Governance

When you franchise an existing business, shared advertising can help build recognition beyond your original location. But collecting a marketing contribution creates responsibilities that do not arise when you spend only your own money. Before launching your franchise offer in Ireland, establish how the fund will operate, what it can pay for and how franchisees will see the results. The priority is not the levy percentage: it is a credible system for managing the money.

1. Define what the marketing fund is for

Irish franchise guidance recognises advertising levies as a common contribution towards shared promotional activity. Do not assume, however, that the phrase ‘brand marketing’ gives everyone the same understanding of what their payments will buy.

Write a short fund policy distinguishing three categories:

• Shared customer marketing: campaigns, creative assets and other activity intended to attract customers to the franchise brand.
• Local marketing: activity arranged or funded by an individual franchisee for their own business.
• Franchisor recruitment: activity intended to sell franchise opportunities rather than attract customers.

Decide which costs belong in the shared fund and which remain the franchisor’s responsibility. Franchise recruitment should not quietly be charged to a fund presented as customer advertising. If any such expenditure is proposed, obtain legal advice on clear contractual wording and explain it before a prospect commits.

Address less obvious costs too: website maintenance, agency retainers, photography, campaign software and internal staff time. If administration costs will be charged, specify the basis and how they will be reported.

Distinguish shared benefit from equal spending. A national campaign may help the franchise community without producing identical results for every location. Avoid promising equal local expenditure unless you can actually deliver it.

2. Put the commitments in the agreement

In the Republic of Ireland, there is no dedicated franchise statute, mandatory franchise disclosure regime or franchise-specific registration system. Ordinary contract law governs the agreement, alongside relevant intellectual property, competition, data protection and other general laws. Advertising must also comply with applicable rules, including the Consumer Protection Act 2007 provisions on misleading commercial practices towards consumers.

The Irish Franchise Association’s code of ethical conduct applies through association membership; it is not a statutory franchise law. Do not confuse an association requirement with a legal requirement applying to every franchisor.

Ask an Irish solicitor experienced in franchising to align the marketing policy with your franchise agreement. The documents should explain:

• Who receives and administers the contributions.
• The permitted spending categories and any exclusions.
• Who approves budgets and supplier appointments.
• Whether unspent balances carry forward.
• What reports franchisees receive and when.
• How contributions or fund rules may be changed.
• How outstanding contributions and balances are treated when participation ends.

Specify whether the franchisor has discretion over campaigns or must consult franchisees before particular decisions. Consultation is not the same as a right of approval.

Do not promise that money is held on trust, independently audited or protected from the franchisor’s creditors unless the legal and accounting arrangements genuinely support that promise. A separately labelled bank account does not, by itself, settle those questions.

3. Establish spending controls before collecting money

Use a dedicated accounting ledger so contributions, expenditure and carried-forward balances can be identified. Discuss with your accountant whether a separate bank account would improve administration and how VAT should be handled. Do not assume the levy has a particular tax treatment simply because it is earmarked for marketing.

Prepare an opening budget based on the franchisees you realistically expect to have, not the network you hope eventually to build. A small fund may be better used for reusable campaign assets than an ambitious advertising commitment it cannot sustain.

Allocate responsibility for approving expenditure and checking invoices. For larger commitments, require a second approval where practicable. Record contracts, deliverables and cancellation terms before committing future contributions.

Where the franchisor or a connected business supplies services to the fund, disclose the relationship and explain the charging basis. Keep evidence that the services were delivered. These controls help prevent ordinary commercial decisions becoming disputes about whose interests the fund serves.

4. Report spending and results separately

Provide a regular statement showing opening balance, contributions received, spending by category, committed expenditure and closing balance. Explain material differences from the budget rather than leaving franchisees to guess.

Alongside the financial statement, summarise campaign activity and outcomes. Distinguish advertising reach, enquiries and attributable sales: they are not interchangeable measures. Be clear where tracking cannot reliably connect a campaign to purchases.

Create a proportionate way for franchisees to suggest priorities and raise questions. In a small franchise community, a scheduled marketing review may be sufficient; a larger network may benefit from an advisory group with written terms.

Practical takeaway: Before collecting your first advertising levy, complete a fund policy, contractual provisions, an opening budget and a sample report. If you cannot explain where the money goes, the fund is not ready to launch.