Must I sign and abide by the cooperative agreement for the advertising cooperative in my Azal Coffee franchise's Advertising Area?
Azal_Coffee Franchise · 2024 FDDAnswer 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 your franchise is located within a designated Advertising Area, you are required to join the advertising cooperative established for that area. This membership entails signing and adhering to the cooperative agreement that governs the advertising cooperative's operations.
The cooperative agreement outlines the structure and operation of the advertising cooperative and must be approved by Azal Coffee. If the franchisor does not provide written approval within fourteen days of receiving the agreement, it is considered not approved. Should the members of the advertising cooperative fail to adopt and sign an approved agreement within thirty days after the Advertising Area is designated, you are obligated to sign Azal Coffee's recommended cooperative agreement.
The cooperative agreement cannot alter the terms of the Franchise Agreement but may require you to contribute to the advertising cooperative in addition to any marketing fund contributions you make to Azal Coffee. The amount and timing of these contributions are determined by the advertising cooperative. Each Azal Coffee store within the cooperative, including those operated by the franchisor or its affiliates, has one vote on cooperative matters, with decisions made according to the cooperative agreement or, if unspecified, by a majority vote. The franchisor retains the authority to form, change, dissolve, or merge advertising cooperatives.
Franchisees holding positions within the advertising cooperative must be in good standing with Azal Coffee. The advertising cooperative is responsible for its administration, costs, and expenses, including collecting contributions from members. Azal Coffee is not liable if other franchisees fail to pay their contributions or comply with the cooperative agreement or the cooperative's decisions. This means that as an Azal Coffee franchisee, you are obligated to participate in and financially support the advertising cooperative in your area, adhering to its rules and contributing to its financial stability.