How is the contribution amount to a local advertising cooperative determined 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, if a local or regional advertising cooperative is formed and approved by Aw in the franchisee's area, the franchisee must participate and contribute to the cooperative. The contribution amount and manner are determined by a majority vote of the cooperative members. Each Aw restaurant in the cooperative, whether franchised, company-owned, or affiliate-owned, has one vote.
Contributions to the cooperative can be credited toward the franchisee's local advertising expenditure requirements, which are a minimum of $3,800 per month. However, Aw assumes no liability or obligation regarding the cooperative's maintenance, direction, or administration, including franchisees' failure to contribute.
This means that while Aw franchisees are required to participate in local advertising cooperatives if formed, the specific amount they contribute is decided by the cooperative members themselves, not directly by Aw. This gives franchisees a voice in local advertising strategies but also carries the risk that they will be obligated to contribute amounts they find unreasonable.