What are some examples of how Cordova may use the Brand Development Fund?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
We may use the Brand Development Fund for market studies, research, service development, product development, testing, research studies, technology development, advertising and public relations studies or services, creative production and printing of advertising and marketing materials, advertising copy and commercials, tracking costs, agency fees, advertising councils, franchisee advisory councils, administrative costs, which may include reimbursement for direct administrative and personnel costs associated with advertising and public relations, and any other costs associated with the development, marketing and testing of advertising, marketing and public relations materials, and the purchase of media placement, advertising time and public relations materials in national, regional or other advertising and public relations media in a manner determined by us, in our discretion, to be in the best interest of the franchisees and the System.
Our company and/or affiliate owned Cordova Businesses may but are not required to contribute to the Brand Development Fund.
The Brand Development Fund will be required to maintain unaudited financial records detailing its expenditures and will make available to you (no more frequently than one time in any 12-month period) an unaudited accounting of how the monies contributed to the Brand Development Fund were spent each year.
We are not required to segregate the Brand Development Fund from our general operating funds and we are not a fiduciary or trustee of the Brand Development Fund.
The Brand Development Fund will not be used to directly promote your Cordova Business or the marketing area in which your Cordova Business will be located. (Franchise Agreement, Article 9.A.).
We may utilize the Brand Development Fund to develop and test various media and technologies for potential utilization and/or improvement of the operations of Cordova Businesses and the marketing of Cordova Businesses.
These technology developments and/or improvements may relate, among other things, to our website and to the interaction and potential enhancement of web offerings that may or may not be implemented on behalf of Cordova Businesses.
You may or may not benefit from these technology developments and improvements. (Franchise Agreement, Article 9.A.).
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 23–28)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, the Brand Development Fund can be used for a variety of purposes related to marketing, research, and development. Franchisees are required to contribute a monthly sum not to exceed 2% of their monthly Gross Sales to this fund, giving them a vested interest in how it is managed and spent. However, Cordova is not required to segregate the Brand Development Fund from its general operating funds and is not a fiduciary or trustee of the Brand Development Fund. The Brand Development Fund will not be used to directly promote a franchisee's Cordova Business or the marketing area in which their Cordova Business will be located.
Cordova details that the Brand Development Fund may be used for market studies, research, service and product development, testing, and technology development. It can also cover advertising and public relations studies or services, the creation and printing of advertising and marketing materials, and the production of advertising copy and commercials. Other potential uses include tracking costs, agency fees, advertising councils, franchisee advisory councils, and administrative costs, including reimbursements for direct administrative and personnel costs related to advertising and public relations.
Furthermore, Cordova may use the Brand Development Fund to develop and test various media and technologies to potentially improve the operations and marketing of Cordova Businesses. These technology developments and improvements may relate to Cordova's website and the enhancement of web offerings. Franchisees may or may not directly benefit from these technology developments and improvements. Cordova may also use the fund to compensate themselves for administrative fees, internal employee salaries, expenses, and overhead associated with managing the Brand Development Fund and performing related services. While the fund will not be used to directly market the sale of Cordova Business franchises, the resulting advertising and marketing materials, including the System website, may contain information about franchise opportunities and contact information for franchise inquiries.
Cordova will provide an unaudited accounting of how the Brand Development Fund's monies were spent each year, available to franchisees no more than once in any 12-month period. This provides some transparency, but franchisees should be aware that the accounting is unaudited, and Cordova has significant discretion in how the funds are used. Prospective franchisees should inquire about the historical uses of the Brand Development Fund and Cordova's strategic plans for its future use to better understand how their contributions will be leveraged to benefit the overall brand and system.