factual

What happens if Casiola does not institute a Brand Development Fund?

Casiola Franchise · 2024 FDD

Answer from 2024 FDD Document

s, fees, and expenses associated with same to Franchisee, which such charges, together with a reasonable administrative fee for Franchisor's expenses in so acting, shall be immediately payable by Franchisee to Franchisor upon demand. The foregoing remedies are in addition to any other remedies Franchisor may have under this Agreement, at law, or in equity.

ARTICLE 9 BRAND DEVELOPMENT AND MARKETING

Franchisor is not required to conduct any marketing on behalf of Franchisee or the System.

9.A. BRAND DEVELOPMENT FUND

At all times and from time to time, as determined by Franchisor, in Franchisor's Reasonable Business Judgment, Franchisor may institute, implement, maintain, delegate and administer a brand development fund (the "Brand Development Fund"). The following shall apply to the Brand Development Fund at all times throughout the Term:

  • (1) If Franchisor institutes the Brand Development Fund, Franchisee shall pay, on the Due Date, a mandatory and continuing fee to the Brand Development Fund in an amount equal to a percentage of Franchisee's gross Commission+ Fees (as determined and designated by Franchisor in Franchisor's Reasonable Business Judgment) for each monthly Accounting Period (the "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 Casiola's 2024 Franchise Disclosure Document, Casiola is not required to conduct any marketing on behalf of the franchisee or the system. Casiola has the option to institute, implement, maintain, delegate, and administer a brand development fund at any time, as determined by Casiola in its reasonable business judgment.

If Casiola does not institute a Brand Development Fund, franchisees would not be required to pay a Brand Development Fund Fee, which is a mandatory and continuing fee equal to a percentage of the franchisee's gross Commission+ Fees. However, Casiola is under no obligation to conduct marketing on behalf of the franchisee or the system if the fund is not established.

Even if Casiola does institute a Brand Development Fund, franchisees should note that Casiola has sole discretion over the strategic direction, creative concepts, materials, and endorsements used by the Brand Development Fund, as well as the geographic, market, and media placement and allocation thereof. The Brand Development Fund will also not be utilized to directly or indirectly market or promote the Franchised Business.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.