What is the Angry Chickz franchisee's obligation regarding contributions to the Co-op Advertising Region?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
hings, geographic region, address, telephone number(s), and service items.
- 8.7 Co-op Advertising. Company may, but is not obligated to, establish regions for co-operative advertising ("Co-op Advertising Regions"), to coordinate advertising, marketing efforts and programs and maximize the use of local and/or regional advertising media.
- 8.7.1 If Company creates a Co-op Advertising Region for the region in which the Franchised Business is located, Franchisee shall become a subscriber and member of the Co-op Advertising Region. Franchisee will execute and participate in accordance with the organizational and formation documents prescribed by Company for the Co-op Advertising Region. The size and membership of such regions shall be binding upon Franchisee, and all other similarly situated franchisees of the System and Company or such Affiliate of Company, if it operates Restaurant(s) in the region; provided, however, that Company reserves the right to exempt itself, its Affiliates and/or certain franchisees from participation, including in connection with Restaurants at Non-Traditional Venues in the region. At all meetings of Co-op Advertising Region each participating member shall be entitled to one vote for each Restaurant located within the Co-op Advertising Region or such other vote as may reasonably be determined by Company.
- 8.7.2 Franchisee and other members of the Co-op Advertising Region, whose agreements require their participation, will contribute to the Co-op Advertising Region such minimum amount as may be determined by Company, but such minimum amount designated by Company but is not expected to exceed 1%
of Gross Sales (the "Co-op Minimum"); provided however, the rate of contribution may be changed from time to time upon the affirmative vote or consent of at least a majority of the voting power of the Co-op Advertising Region, but the Co-op Advertising Region may not reduce the contribution rate below any minimum established by Company. Contributions to the Co-op Advertising Region shall be in addition to the Local Advertising Expenditure.
- 8.7.3 Each Co-op Advertising Region will decide the use of funds available to it for advertising or marketing. The Co-op Advertising Region shall then in writing request approval from Company. Company shall not withhold its approval unreasonably, but no placement of advertising or commitment of funds on behalf of a Co-op Advertising Region will be made without Company's prior written approval. Company reserves the right to establish standards concerning the operation of the Co-op Advertising Region, advertising agencies retained by Co-op Advertising Region, and advertising programs conducted by Co-op Advertising Region. Any disputes (other than pricing) arising among or between Franchisee, other franchisees, and/or the Co-op Advertising Region may be resolved by Company whose decision shall be final and binding on all parties. No Co-op Advertising Region may appoint or pay from the funds collected by the Co-op Advertising Region fees or costs of any advertising agency or buying group without the prior written consent of Company.
- 8.8 Advertising Council. Company reserves the right to establish a franchise advisory council ("Franchise Advisory Council") to advise and consult with Company in connection with the establishment, modification, continuance, or other decisions or considerations affecting marketing programs. In the event Company establishes a Franchise Advisory Council, Company will have the exclusive right to determine all aspects of the organizational structure, manner of operation and rights to participate. If required by Company, Franchisee shall patriciate in the Franchise Advisory Council on the terms prescribed by Company.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, if Angry Chickz establishes a Co-op Advertising Region in the area where the franchise is located, the franchisee is obligated to become a member. As a member, the franchisee must participate according to the organizational documents that Angry Chickz prescribes for the Co-op Advertising Region. The size and membership of the Co-op Advertising Region are binding on the franchisee. However, Angry Chickz retains the right to exempt itself, its affiliates, and certain franchisees, especially those in Non-Traditional Venues, from participating in the Co-op Advertising Region. Each member gets one vote per restaurant at meetings, or another vote allocation as determined by Angry Chickz.
Franchisees must contribute a minimum amount to the Co-op Advertising Region, as determined by Angry Chickz. This minimum contribution is not expected to exceed 1% of Gross Sales. However, the contribution rate can be changed with the affirmative vote or consent of a majority of the voting power within the Co-op Advertising Region, but it cannot be reduced below any minimum set by Angry Chickz. These contributions are in addition to the franchisee's Local Advertising Expenditure. Each Co-op Advertising Region decides how to use its funds for advertising or marketing, but they must get written approval from Angry Chickz before making any advertising placements or fund commitments.
Angry Chickz also reserves the right to set standards for the Co-op Advertising Region's operations, including the advertising agencies they use and the advertising programs they conduct. Any disputes (other than pricing) among franchisees or between franchisees and the Co-op Advertising Region can be resolved by Angry Chickz, whose decision will be final. The Co-op Advertising Region cannot appoint or pay any advertising agency or buying group without Angry Chickz's prior written consent. Failure to meet obligations to any Co-Op Advertising Region can result in a default of the franchise agreement.