Can Crave use the Brand Development Fund to defray general operating expenses?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
The Fund shall be held in a non-interest bearing account separate from our other funds, and shall not be used to defray any of our general operating expenses, except that we have the right to reimburse ourselves out of the Fund for the total costs (including indirect costs such as salaries for our employees who devote time and effort to Fund related activities and overhead expenses) of developing, producing and distributing any advertising materials and collecting the Brand Development Fee (including attorneys', auditors' and accountants' fees and other expenses incurred in connection with collecting any Brand Development Fee).
We also reserve the right to use a portion of the Fund to subsidize the cost of presenting refresher training and/or a franchisee meeting.
The Fund and its earnings shall not otherwise inure to our benefit except that any resulting technology and intellectual property shall be deemed our property.
- 8.3.3 A statement of the operations of the Fund shall be prepared annually by our accountants and shall be made available to you on written request.
The cost of the statement shall be paid by the Fund.
We are not required to have any Fund statement audited, but if we choose to have the Fund audited it will be at the Fund's expense.
Except as expressly provided in this Section 8.3, we assume no direct or indirect liability or obligation to you with respect to the maintenance, direction or administration of the Fund.
We have no obligation to spend any amount on advertising in your area or Designated Territory.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the Brand Development Fund cannot be used to defray Crave's general operating expenses. However, Crave has the right to reimburse itself from the Fund for the total costs associated with developing, producing, and distributing advertising materials. This includes indirect costs like salaries for employees involved in Fund-related activities and overhead expenses. Reimbursement also extends to the costs of collecting the Brand Development Fee, including fees for attorneys, auditors, and accountants.
Crave also reserves the right to use a portion of the Brand Development Fund to subsidize the cost of presenting refresher training and/or franchisee meetings. The Fund is held in a non-interest-bearing account separate from Crave's other funds. Any technology and intellectual property resulting from the Fund's activities will be deemed Crave's property.
A statement of the Fund's operations will be prepared annually by Crave's accountants and made available to franchisees upon written request, with the cost of the statement paid by the Fund. While an audit of the Fund statement is not required, Crave may choose to have one conducted at the Fund's expense. Crave assumes no direct or indirect liability or obligation regarding the Fund's maintenance, direction, or administration, except as expressly provided. Crave is not obligated to spend any amount on advertising in a franchisee's specific area or Designated Territory.
For a prospective Crave franchisee, this means that while the Brand Development Fund is intended for marketing and advertising purposes, Crave can use it to cover specific costs related to advertising development, fee collection, training, and meetings. Franchisees should be aware that they may not see direct benefits from the Fund's expenditures in their specific location and that Crave retains control over the Fund's administration and resulting intellectual property.