What is the 'Brand Development Fund Contribution' for a Devon Creek franchise, and where is it described?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
- 13.3.1 Franchisor may establish a national fund on behalf of the System for national advertising, marketing, and brand development (the "Brand Fund"). Franchisee is required to contribute One and a half percent (1.5%) of monthly Gross Revenue, to the Brand Development Fund ("Brand Development Fund Contribution"). Franchisor reserves the right to increase the Brand Development Fund Contribution to an amount not to exceed three percent (3%) of monthly Gross Revenue. Payments will be made in the same manner and time as the Royalty Fees.
- 13.3.2. Franchisor shall direct the Brand Fund and shall have sole discretion to approve or disapprove the creative concepts, materials and media used in such programs and the placement and allocation thereof. Franchisee agrees and acknowledges that the Brand Development Fund is intended to maximize general public recognition and acceptance of the Marks and enhance the collective success of all Franchised Businesses operating under the System.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to the 2024 Devon Creek Franchise Disclosure Document, the Brand Development Fund Contribution is detailed in Item 22, specifically within section 13.3.1. Franchisees are required to contribute one and a half percent (1.5%) of their monthly Gross Revenue to the Brand Development Fund. This contribution is used for national advertising, marketing, and brand development efforts managed by Devon Creek. The payments are to be made in the same manner and time as the Royalty Fees.
Devon Creek retains the right to increase this contribution, although it cannot exceed three percent (3%) of the franchisee's monthly Gross Revenue. This flexibility allows Devon Creek to adjust marketing efforts as needed, but it also introduces a potential cost increase for franchisees. The Brand Development Fund is intended to maximize recognition of the Devon Creek brand and enhance the collective success of all franchised businesses within the system.
The FDD also states that Devon Creek has sole discretion over the Brand Fund, including approving creative concepts, materials, and media used in advertising programs. While the fund is intended to benefit all franchisees, Devon Creek does not guarantee that expenditures will be equivalent or proportionate to each franchisee's contribution, nor that any particular franchisee will directly benefit from advertising. Franchisees should consider that their contributions might not always result in immediate or measurable local benefits, as the fund is geared towards broader, national-level marketing initiatives.