Can Cordova use the Brand Development Fund for administrative costs?
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.
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, Cordova may use the Brand Development Fund for administrative costs. Franchisees contribute a monthly sum not to exceed 2% of their monthly Gross Sales to this fund, which Cordova controls and administers.
Cordova has broad discretion over how the Brand Development Fund is used. Permissible uses include market studies, research, service and product development, testing, advertising and public relations, creative production, tracking costs, agency fees, advertising councils, franchisee advisory councils, and administrative costs. Administrative costs may include reimbursement for direct administrative and personnel costs associated with advertising and public relations.
Cordova can also use the Brand Development Fund to compensate themselves for administrative fees associated with managing the fund, including internal employee salaries, expenses, and overhead. However, the Brand Development Fund cannot be used to directly promote an individual franchisee's Cordova Business or the marketing area in which it is located, nor can it be used to directly market the sale of Cordova Business franchises.
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. Cordova will maintain unaudited financial records detailing the fund's expenditures and will make an unaudited accounting available to franchisees no more than once in any 12-month period.