How is the Brand Development Fund Fee calculated for a Casiola franchise?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
he "Brand Development Fund Fee"), provided, however, Franchisee will not be required to contribute more than 2% of the Gross Rental Revenues+ of the Franchised Business for each monthly Accounting Period or, instantly on a per transaction basis;
- (2) Franchisor will provide Franchisee with written notice of the percentage of Franchisee's gross Commission+ Fees that Franchisee is required to contribute to the Brand Development Fund. Upon such written notice to Franchisee, the percentage of Franchisee's gross Commission+ Fees to be paid by Franchisee to the Brand Development Fund will be applicable for each and every monthly Accounting Period thereafter during the Term until otherwise designated by Franchisor in writing. The Brand Development Fund Fee shall be paid to Franchisor on the Due Date and in accordance with the payment terms and method set forth in Article 5.B. for the payment of Royalty Fees or as otherwise designated by Franchisor;
- (3) Franchisor, in Franchisor's Reasonable Business Judgment, shall direct all advertising, media placement, marketing and public relations programs and activities financed by the Brand Development Fund, with sole discretion over the strategic direction, creative concepts, materials, and endorsements used by the Brand Development Fund, and the geographic, market, and media placement and allocation thereof. Without limiting the foregoing, the Brand Development Fund may also be utilized for evaluation and monitoring of the Bookings and Management Systems, maintenance and upgrades to the System Website, and development of Digital Media;
- (4) Franchisee agrees that the purpose of the advertising, media, marketing and activities financed by the Brand Development Fund is and shall be for the general enhancement of the System brand as associated with the Licensed Marks and general public brand recognition and awareness of the Licensed Marks. The Brand Development Fund will not be utilized to directly or indirectly market or promote the Franchised Business or, unless otherwise directed by Franchisor, in Franchisor's Reasonable Business Judgment, pay for media placements that may benefit or include any media market that includes Franchisee's Administrative Office or Operating Market;
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, the Brand Development Fund Fee is calculated as a percentage of the franchisee's gross Commission+ Fees. The specific percentage is determined by Casiola and can be changed with written notice to the franchisee. This percentage will then be applicable for each monthly accounting period during the term of the franchise agreement, unless otherwise specified in writing by Casiola.
The Brand Development Fund Fee is paid to Casiola on the same date and using the same method as the royalty fees, as outlined in Article 5.B of the franchise agreement, or as otherwise directed by Casiola. Casiola has the authority to direct all advertising, media placement, marketing, and public relations programs financed by the Brand Development Fund. This includes having sole discretion over the strategic direction, creative concepts, materials, endorsements, and the geographic, market, and media placement and allocation of these activities.
The Brand Development Fund may be used for various purposes, including evaluating and monitoring the Bookings and Management Systems, maintaining and upgrading the System Website, and developing Digital Media. However, the fund will not be used to directly market or promote an individual franchised business or pay for media placements that primarily benefit the franchisee's Administrative Office or Operating Market, unless otherwise directed by Casiola. Casiola Businesses owned by the franchisor or its affiliates are not required to pay the Brand Development Fund Fee.
Prospective franchisees should be aware that the Brand Development Fund is not a trust, and Casiola is not a trustee or fiduciary of the fund. Casiola can deposit and maintain the funds in its general accounts, and these funds are not required to be segregated from other assets. Casiola may spend more or less than the aggregate contributions to the fund in a given year and may borrow or invest surplus funds. While Casiola aims to develop effective advertising and marketing, it does not guarantee that expenditures will be proportionate to contributions from franchisees in any specific geographic area or that any franchisee will directly benefit in proportion to their contribution.