Can Cordova use the Brand Development Fund for agency fees?
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, the Brand Development Fund can be used for agency fees. Franchisees contribute up to 2% of their monthly Gross Sales to this fund. Cordova has broad discretion over how the Brand Development Fund is spent.
Cordova details a range of potential uses for the Brand Development Fund, including market studies, research, service and product development, testing, advertising and public relations services, creative production, printing of marketing materials, and the purchase of media. Importantly, the fund can cover agency fees, advertising councils, franchisee advisory councils, and administrative costs, including reimbursements for administrative and personnel costs related to advertising and public relations.
Cordova is not required to segregate the Brand Development Fund from its general operating funds and is not considered a fiduciary or trustee of the fund. The Brand Development Fund cannot be used to directly promote an individual franchisee's Cordova Business or its specific marketing area. Cordova may use the fund to develop and test technologies that may or may not benefit individual franchisees.
Franchisees receive an unaudited accounting of how the Brand Development Fund's monies were spent each year, available no more than once every 12 months. Cordova and its affiliated businesses may contribute to the Brand Development Fund, but are not required to do so. This structure gives Cordova significant control over the fund's use, with the stated goal of benefiting the franchisees and the overall Cordova system.