If a Cooperative is established for my Alloy Facility's geographic area, must I become a member?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
materials proposed to be used by an Advertising Group must be approved by us prior to use.
A Cooperative will be a more formal entity, organized for the exclusive purposes of administering marketing programs and developing promotional materials for use by the members, subject to our approval as described above. If a Cooperative has been established for a geographic area where your Facility is located when the Franchise Agreement is signed, or if any Cooperative is established during the term of the Franchise Agreement, you must become a member of the Cooperative. If the Cooperative will operate according to written documents, we must approve of these documents, and a copy of the Cooperative documents applicable to the geographic area in which your Facility will be located will be provided to you if you request it. You will not have to participate in more than one Cooperative.
The payments you make to a Cooperative may be applied by you toward satisfaction of your local marketing requirement. If the amount you contribute to a Cooperative is less than your local advertising requirement, you must still spend the difference locally. By vote of the members, the members will determine the amount that each member must contribute to the Cooperative, but the amount you must contribute will not be more than 1% of Gross Sales, unless the members of the Cooperative vote to exceed that amount. All contributions to the Cooperative will be maintained and administered in accordance with the documents governing the Cooperative, if any. The Cooperative will be operated solely as a conduit for the collection and expenditure of the Cooperative fees for the purposes outlined above. No marketing or promotional plans or materials may be used by the Cooperative or furnished to its members without first obtaining our approval, as described above under "Local Marketing". Currently there are no Cooperatives in the System. The Cooperative is not required to prepare an annual financial statement.
Each Cooperative member, including us or our affiliates, will have one vote on all Cooperative matters, but no franchisee (or commonly controlled group of franchisees) will have greater than 25% of the total vote.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 31–42)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if a Cooperative is established for the geographic area where your Alloy facility is located, either when you sign the Franchise Agreement or at any point during the agreement's term, you are required to become a member of that Cooperative. Alloy notes that you will not have to participate in more than one Cooperative.
The purpose of the Cooperative is to administer marketing programs and develop promotional materials for its members, subject to Alloy's approval. Alloy retains the right to approve the Cooperative's written documents if they exist. If such documents exist, Alloy will provide you with a copy if you request it.
Your contributions to the Cooperative can count toward any required minimum local marketing spending. The members of the Cooperative, including you, will determine the contribution amount, but your contribution will not exceed 1% of Gross Sales unless the members vote to exceed that amount. All contributions will be managed according to the Cooperative's governing documents. Currently, there are no Cooperatives in the Alloy system. Each Cooperative member, including Alloy or its affiliates, has one vote on all Cooperative matters, but no franchisee (or commonly controlled group) will have greater than 25% of the total vote.