Are Brand Development Fund Fees applicable to all Wind-Down Activities 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.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
Based on the 2024 Casiola Franchise Disclosure Document, upon written notice to the franchisee, the Brand Development Fund Fee, calculated as a percentage of the franchisee's gross Commission+ Fees, will be applicable for each monthly accounting period during the term of the agreement. This obligation continues until the franchisor designates otherwise in writing.
The FDD defines "Wind-Down Activities" as performing approved services and products for customers of the franchised business and end-user property rental customers who are subject to a Rental Agreement entered into before the expiration or termination of the Franchise Agreement, but which require performance after the agreement ends.
Upon termination or expiration of the Franchise Agreement, the franchisee must pay all sums and fees due to Casiola, including Royalty Fees and Advertising Contributions. The franchisee must also cease operating under the Casiola system, except when performing Wind-Down Activities as directed by Casiola. The FDD states that the percentage of gross Commission+ Fees to be paid to the Brand Development Fund will be applicable for each monthly accounting period during the term. It does not explicitly address whether Brand Development Fund Fees are applicable to Wind-Down Activities. A prospective franchisee should seek clarification from Casiola regarding the applicability of these fees during the wind-down period.