What is Casa De Corazon responsible for regarding the Brand Fund?
Casa_De_Corazon Franchise · 2025 FDDAnswer from 2025 FDD Document
franchisees must contribute to this Fund. Centers operated by us or our affiliates will contribute to this Fund.
We account for the contributions to this Fund separately from our other revenues, and we do not use them to pay any of our general operating expenses other than our costs of administering the Fund and the costs, including salaries and overhead, of personnel engaged in administration or operation of the System Brand Fund, including those performing services that benefit, or are on behalf of, the System Brand Fund, including creative services. The purpose of the Fund is to develop programs that benefit the Casa de Corazon brand and promote the Marks. This means we may use monies in the Fund for any purpose that promotes the Casa de Corazon name, including the creation, production and placement of commercial advertising; to pay for agency costs and commissions; to pay the costs to create and produce video, audio and written advertisements; to pay for direct mail and other media advertising, including internet advertising, internet search engine campaigns and the cost to maintain and update our or our affiliate's websites, web pages, social media and social networking sites, profiles and accounts and for the costs of search engine optimization; to pay for salaries, administrative costs, direct expenses, and overhead we incur in activities related to the operation and administration of the Fund; local and regional promotions; public relations campaigns including the cost of retaining public relations firms; market research; and other advertising and marketing activities.
We may create advertising materials in-house or use international, national, regional and local agencies. Advertising may be placed in local, regional or national media of our choice, including print, direct mail, electronic and online advertising, video, radio or television. We do not guarantee that advertising expenditures from the Fund will benefit you or any other franchisee directly, on a pro rata basis, or at all. It is our responsibility to determine how these monies are spent. We are not required to use monies in this Fund to benefit any individual market. However, we will not spend any portion of these monies for advertising principally designed to solicit the sale of franchises, but we may use monies in the Fund to update and administer our or our affiliate's website, which may contain information on franchise opportunities. In our fiscal year ended December 31, 2024, 5% of expenditures from the Brand Fund were
used for media placement, 2% were used for production of advertising, 62% were used for social media and internet marketing, and 31% for administrative expenses.
Any unused amounts in the Fund in any calendar year will be carried over to the following year. Any interest the Fund earns will be used for advertising before we use any principal. At your request, we will make available to you an annual accounting for the Fund that shows how the Fund proceeds were spent for the previous year, but these statements will not be audited. We may, but have no obligation to, loan amounts to the Fund and can determine the repayment obligation of the Fund, including interest rate of the loan and repayment terms, as we see fit. Currently, we would intend any loan to be due on demand, and until paid in full would accrue compound interest at the prime rate of interest as determined annually.
We do not have an advertising council that advises us on advertising policies.
Local Marketing
You must conduct your own local marketing of your Center. You must spend at least $10,000 to market the grand opening of your Center on marketing we approve. You must also spend at least $10,000 per year on local marketing that we approve for your Center, exclusive of the grand opening advertising spend requirement. If you do not meet any of these minimum advertising requirements, in addition to our other rights, you must pay us the difference and we will put that amount in the System Brand Fund. (Franchise Agreement – Section 8(d)).
You must obtain our prior approval of all local marketing you engage in for your Center.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 23–31)
What This Means (2025 FDD)
According to Casa De Corazon's 2025 Franchise Disclosure Document, Casa De Corazon is responsible for maintaining and administering the Brand Fund. Franchisees are required to contribute 2% of their monthly Gross Revenue to this fund. These contributions are due at the same time as the royalty fee, based on the previous month's gross revenue. All franchisees, including those operated by Casa De Corazon or its affiliates, must contribute to the Brand Fund.
The purpose of the Brand Fund is to develop programs that benefit the Casa de Corazon brand and promote its marks. Casa De Corazon has the discretion to use the fund for various activities that promote the brand, including creating and placing commercial advertising, covering agency costs and commissions, producing video, audio, and written advertisements, and paying for direct mail and other media advertising, such as internet advertising and search engine optimization. The fund can also be used for salaries, administrative costs, direct expenses, overhead related to the fund's operation, local and regional promotions, public relations campaigns, market research, and other advertising and marketing activities.
Casa De Corazon may create advertising materials in-house or use international, national, regional, and local agencies. Advertising can be placed in various media, including print, direct mail, electronic and online advertising, video, radio, or television. Casa De Corazon does not guarantee that advertising expenditures from the fund will directly benefit any franchisee on a pro rata basis or at all and determines how the funds are spent. However, Casa De Corazon will not use the fund to solicit the sale of franchises, although it may use the fund to update and administer its website, which may contain information on franchise opportunities. In the fiscal year ended December 31, 2024, 5% of expenditures from the Brand Fund were used for media placement, 2% were used for production of advertising, 62% were used for social media and internet marketing, and 31% for administrative expenses.
Any unused amounts in the Fund in any calendar year will be carried over to the following year. Any interest the Fund earns will be used for advertising before Casa De Corazon uses any principal. At a franchisee's request, Casa De Corazon will provide an annual accounting for the Fund, showing how the proceeds were spent for the previous year, although these statements will not be audited. Casa De Corazon may loan amounts to the Fund and determine the repayment obligation, including the interest rate and repayment terms. Currently, Casa De Corazon intends any loan to be due on demand and accrue compound interest at the prime rate of interest as determined annually. Casa De Corazon does not have an advertising council that advises on advertising policies.