factual

Who determines the timing and amounts of contributions to the advertising cooperative for my Azal Coffee franchise?

Azal_Coffee Franchise · 2024 FDD

Answer from 2024 FDD Document

In addition, we may require an advertising cooperative to be formed and operated in an Advertising Area. If the Franchise Business is within that designated Advertising Area, you must join, maintain a membership in, and sign and abide by the cooperative agreement for the advertising cooperative in that Advertising Area. Each advertising cooperative must adopt a cooperative agreement governing the organization and operation of the advertising cooperative. If specified by us, the cooperative agreement must require contributions to the advertising cooperative to be paid to us or to the advertising cooperative by electronic funds transfer. We must approve the structure of the advertising cooperative as well as the cooperative agreement and any changes to that agreement. The cooperative agreement must be submitted to us for prior approval. If we have not approved the cooperative agreement in writing within fourteen (14) days after receipt, the cooperative agreement will be deemed not approved. If the members of the advertising cooperative do not adopt and sign an approved cooperative agreement within thirty (30) days after we designate the Advertising Area for the advertising cooperative, the advertising cooperative must adopt and you must sign our then current recommended cooperative agreement. The cooperative agreement cannot modify the terms of this Agreement but may require you to make contributions to the advertising cooperative in addition to any marketing fund contributions you are required to make to us. You must make contributions to the advertising cooperative at the times and in the amounts as determined by the advertising cooperative. Each Store in the advertising cooperative (including Stores operated by us or our affiliates) will have one vote on matters before the advertising cooperative. Decisions will be made as provided in the cooperative agreement, or if not otherwise specified, based on a majority of the votes entitled to be cast by the members of the advertising cooperative. Any franchisee holding an officer, management, executive or committee position with the advertising cooperative must be a franchisee-in-good-standing as defined in Section 8.15. The administration, costs, and expenses of each advertising cooperative will be the responsibility of the advertising cooperative. The advertising cooperative will be responsible for the collection of contributions from its members and we will not be responsible to you if other franchisees in the advertising cooperative fail to pay contributions or to otherwise abide by the cooperative agreement or the decisions of the advertising cooperative. We will have the authority to form, change, dissolve or merge advertising cooperatives.

Source: Item 22 — CONTRACTS (FDD page 51)

What This Means (2024 FDD)

According to Azal Coffee's 2024 Franchise Disclosure Document, if an advertising cooperative is formed in your designated Advertising Area, you are required to join and adhere to its cooperative agreement. The timing and amounts of contributions to the advertising cooperative are determined by the advertising cooperative itself.

Azal Coffee must approve the structure and cooperative agreement of the advertising cooperative, and any changes to the agreement. If Azal Coffee does not provide written approval within fourteen days of receipt, the agreement is deemed not approved. If the members do not adopt and sign an approved agreement within thirty days after the Advertising Area designation, the cooperative must adopt Azal Coffee's recommended agreement.

The cooperative agreement cannot modify the franchise agreement terms but may require contributions in addition to any marketing fund contributions you make to Azal Coffee. Each Azal Coffee store in the cooperative, including those operated by Azal Coffee or its affiliates, has one vote on cooperative matters. Decisions are made as specified in the cooperative agreement or, if not specified, by a majority vote. The advertising cooperative is responsible for its administration, costs, expenses, and the collection of contributions from its members. Azal Coffee has the authority to form, change, dissolve, or merge advertising cooperatives.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.