Is Angry Chickz obligated to establish co-operative advertising regions?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, Angry Chickz is not required to establish co-operative advertising regions. The FDD states that Angry Chickz may, but is not obligated to, establish these regions to coordinate advertising and marketing efforts. These regions, referred to as "Co-op Advertising Regions," are designed to maximize the use of local and regional advertising media.
If Angry Chickz does establish a Co-op Advertising Region in the area where a franchisee's business is located, the franchisee is required to become a member and participate in that region. Participation involves adhering to the organizational documents prescribed by Angry Chickz for the Co-op Advertising Region. The size and membership of these regions are binding on the franchisee and other similarly situated franchisees, as well as Angry Chickz itself or its affiliates if they operate restaurants in the region. However, Angry Chickz retains the right to exempt itself, its affiliates, and/or certain franchisees from participation, particularly in connection with restaurants at Non-Traditional Venues.
Franchisees should note that membership in a Co-op Advertising Region, if established, requires financial contributions. Franchisees and other members must contribute a minimum amount determined by Angry Chickz, which is not expected to exceed 1% of Gross Sales. This contribution rate can be changed with the approval of a majority vote 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 required Local Advertising Expenditure. Each Co-op Advertising Region decides how to use its funds for advertising and marketing, subject to Angry Chickz's written approval, which will not be unreasonably withheld. Angry Chickz also reserves the right to set standards for the operation, advertising agencies, and advertising programs of the Co-op Advertising Region.