Marketing and NAF fees

Marketing fees support the brand-level advertising that no single owner could fund alone. Understanding how the National Advertising Fund (NAF) works helps you judge whether a system invests properly in demand generation.

What the NAF typically funds

A NAF pools contributions from all franchisees. The franchisor uses it to pay for:

• National or regional advertising
• Digital campaigns and social media
• Creative assets and brand guidelines
• Website and SEO management
• Agency partnerships

These efforts strengthen the brand and help drive customers to every location.

Local vs national responsibilities

The NAF does not replace your local marketing. Most systems expect owners to run local promotions, manage community presence, and budget separately for neighborhood-level advertising.

Healthy systems provide guidance on:

• Required local monthly spend
• Suggested channels
• What tends to work for new locations

How fees are structured

Most brands charge 1–4 percent of gross sales for marketing. Some charge a fixed monthly amount. You will see the exact structure in Item 11 of the FDD.

Example:
If gross sales are $50,000 per month and the NAF fee is 2 percent, your contribution is $1,000 for that month.

What transparency looks like

Operators value clear reporting. Strong systems usually provide:

• Annual summaries of how NAF dollars were spent
• Breakdowns by campaign type
• Explanations for major initiatives
• A Franchisee Advisory Council that reviews plans

Lack of visibility into NAF spending is a common red flag.

What to expect as an owner

You should expect:

• Professional advertising materials
• Brand consistency across markets
• Support for major seasonal pushes
• Clear instructions for running your local marketing

Takeaway:
Evaluate not just the size of the NAF fee, but how well the franchisor explains its use. Good marketing support often separates strong systems from average ones.