Can the Advertising Fund be used to cover costs associated with trademark registrations, prosecution, and enforcement for Churchs Chicken?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees that the Advertising Fund may be used, among other things, to pay for: (a) preparing, producing and disseminating materials and programs for brand building, brand awareness, brand enhancement, promotional, marketing or advertising purposes as Cajun or its designee may determine, including video, audio, digital, written or any other materials; (b) designing, establishing, and maintaining websites, extranets, intranets, search rankings, social media profiles, mobile applications, and other digital or similar marketing; (c) creative development of signage, posters, and décor items including wall graphics and menu graphics / menu boards; (d) hiring and employing advertising agencies and public relations firms to assist with any activities undertaken; (e) sponsoring, sporting, charitable or similar events; (f) establishing, administering and conducting brand building, brand awareness, brand enhancement, promotional, marketing and advertising programs, including, without limitation, purchasing direct mail and other media advertising; (g) preparing, supporting and conducting public relations, community involvement and brand reputation management activities; (h) retention and payment of personalities engaged as spokespersons, advertising and promotional agencies, endorsement contracts, and other outside advisors including retainer and management fees; (i) review of locally produced marketing materials and development of third party facilities for the development of local advertising; (j) supporting market research and other advertising, promotional and marketing activities; (k) supporting development of logo'ed merchandise; (l) costs associated with trademark registrations, prosecution and enforcement, and advertising, including without limitation attorneys' fees and defense costs associated with trademarks, advertising and marketing; and (m) conducting and administering other activities that are directly or indirectly designed to promote or enhance the System, its franchisees, and/or increase System sales, including without limitation development of new products and limited-time menu offerings; franchisee incentive and/or promotional programs; customized materials; up-sell programs, guest response programs; mystery shop and shopper programs; market research; working with public relations firms, advertising agencies and advertising placement services; franchisee advisory council or similar meetings that include advertising and promotions related discussions; loyalty and affinity programs; ordering and delivery platforms; social media account administration and promotion; in-store equipment and technologies related to such marketing programs.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the Advertising Fund can be used to cover costs associated with trademark registrations, prosecution, and enforcement. Specifically, the Advertising Fund may be used for costs associated with trademark registrations, prosecution and enforcement, and advertising, including attorneys' fees and defense costs related to trademarks, advertising and marketing. This indicates that Churchs Chicken franchisees contribute to a fund that, in part, protects the brand's trademarks and advertising efforts.
This is a common practice in franchising, as it allows the franchisor to maintain and protect the brand's intellectual property, which benefits all franchisees. By pooling resources, Churchs Chicken can afford more robust legal protection for its trademarks than individual franchisees might be able to secure on their own. This also ensures consistency in brand protection across all franchise locations.
However, the franchisee agrees to participate in all advertising, marketing, promotions, research, and public relations programs instituted by Cajun (parent company) through the Advertising Fund. The franchisee has no right to the return of any payment to the Advertising Fund, unless such payment was the result of manifest error. Cajun also reserves the right to suspend contributions to and operations of the Advertising Fund for one or more periods that it determines to be appropriate, terminate the Advertising Fund upon 30 days' notice to Franchisee and establish a different advertising fund, and defer, waive or return any advertising contributions required if there has been demonstrated unique, objective circumstances justifying any such deferral, waiver, or return.