Who must approve the formation of a local or regional advertising cooperative for Aw franchisees?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to your individual local advertising, marketing and promotional expenditures and contributions to the Marketing Fund, if a local or regional advertising cooperative is formed either by us or by Papa Ray's Pizza franchisees and approved by us in your area or region, you agree to participate in such cooperative and contribute to the cooperative in the amount and manner agreed upon by a majority of the members of the cooperative.
Each of the Papa Ray's Pizza Restaurants in the cooperative, whether franchised or company-owned or affiliate-owned, shall have one vote in the cooperative.
Contributions made by you to the cooperative will be credited to your local advertising expenditure requirements in Section 12.2 above.
We assume no direct or indirect liability or obligation to you or to any advertising cooperative with respect to the maintenance, direction or administration of the cooperative, including without limitation, any failure by franchisees to make required contributions to the cooperative.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the formation of a local or regional advertising cooperative, whether initiated by Aw or its franchisees, requires Aw's approval. Franchisees in the area or region must participate in the cooperative if it is formed and approved by Aw. The amount and manner of contribution to the cooperative is determined by a majority of the members. Each Aw restaurant in the cooperative, whether franchised, company-owned, or affiliate-owned, has one vote.
Franchisees' contributions to the cooperative are credited toward their local advertising expenditure requirements, as detailed in Section 12.2 of the franchise agreement. However, Aw assumes no direct or indirect liability or obligation regarding the cooperative's maintenance, direction, or administration. This includes any failure by franchisees to make the required contributions.
This means that while Aw franchisees may benefit from participating in a cooperative advertising program, they are still required to contribute to the Marketing Fund and meet minimum local advertising expenditure requirements. The cooperative provides a mechanism for pooling resources and potentially increasing advertising impact, but franchisees must adhere to the cooperative's rules and contribution amounts as determined by the majority of its members. Ultimately, Aw retains control over approving the formation and ensuring compliance with its advertising standards.