Under what conditions can Devon Creek terminate the Brand Development Fund?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
Although the Brand Development Fund is intended to be of perpetual duration, Franchisor may terminate it at any time and for any reason or no reason.
Franchisor will not terminate the Brand Development Fund, however, until all monies in the Brand Development Fund have been spent for advertising or promotional purposes or returned to contributors, without interest, on the basis of their respective contributions.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, the Brand Development Fund is intended to be of perpetual duration. However, Devon Creek retains the right to terminate the Brand Development Fund at any time, for any reason, or for no reason at all.
Despite this broad termination clause, Devon Creek is obligated to ensure that all monies within the Brand Development Fund are properly allocated before termination. Specifically, all funds must be spent on advertising or promotional purposes, or alternatively, returned to the contributors. These returns would be made without interest and would be proportional to each contributor's respective contributions.
This provision offers some assurance to Devon Creek franchisees that their contributions to the Brand Development Fund will be used appropriately, even if the fund is terminated. Franchisees should be aware of Devon Creek's discretion in terminating the fund, but also of the stipulation that all funds must be accounted for before such termination occurs.