What is the 'System Brand Fund' called for Casa De Corazon?
Casa_De_Corazon Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Use of System Brand Fund Disbursements from the Casa de Corazon Brand Fund (the "System Brand Fund") may be made for the payment of expenses incurred by Franchisor in connection with the general promotion of the Names and Marks, including: (i) development and production of advertising and promotional materials; (ii) the cost of formulating, developing and implementing advertising campaigns, including Internet advertising and Internet search engine campaigns and the cost to maintain and update Franchisor's or its affiliates websites, web pages, social media and social networking sites, profiles and accounts and search engine optimization; (iii) the cost of formulating, developing and implementing promotional and public relations programs, including advertising in trade publications; (iv) market research; and (v) the cost of administering the System Brand Fund, including professional fees, the cost of salaries and fringe benefits paid to personnel engaged in administration or operation of the System Brand Fund or paid to those performing services that benefit, or on behalf of, the System Brand Fund, including creative services, and overhead related to all such persons; other administrative costs and direct expenses the Franchisor incurs in activities related to the operation and administration of the System Brand Fund. All interest, if any, earned by the System Brand Fund shall be used for the payment of the foregoing expenses in connection with promotion of the Names and Marks, before application of any principal to those expenses. Methods,
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2025 FDD)
According to Casa De Corazon's 2025 Franchise Disclosure Document, the 'System Brand Fund' is referred to as the "Casa de Corazon Brand Fund". Franchisees are required to contribute to this fund by paying a monthly "Brand Fund Contribution" equivalent to two percent (2%) of the previous month's gross revenues. This contribution is due at the same time the royalty fee becomes due.
The Casa de Corazon Brand Fund is used by the franchisor to cover expenses related to the general promotion of the brand's names and marks. These expenses may include the development and production of advertising and promotional materials, the implementation of advertising campaigns (including online advertising and search engine optimization), the creation of public relations programs, market research, and the administrative costs associated with managing the fund. These administrative costs can include salaries and benefits for personnel involved in the fund's operation, professional fees, and other direct expenses.
Any interest earned by the Casa de Corazon Brand Fund is first applied to cover the aforementioned promotional expenses before any principal is used. The franchisor has sole discretion over the methods, media, advertising content, and terms of advertising campaigns and promotional programs. They also reserve the right to hire an advertising agency, even one affiliated with the franchisor, to assist with advertising efforts. It's important to note that the franchisor is not obligated to conduct marketing and has the discretion to decide how the funds are spent, without necessarily benefiting any individual market or franchisee. The franchisor can dissolve the Brand Fund after all monies have been expended or rebated to franchisees based on their contributions over the prior 12 months.