How does a Bang Cookies franchisee become a member of the Advertising Cooperative?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
, in Franchisor's Reasonable Business Judgment, possesses the right to authorize, establish, designate and de-authorize a local or regional advertising cooperative within those markets that
Franchisor designates (the "Advertising Cooperative"). Franchisee agrees that Franchisor possesses the sole and exclusive right to designate any geographic area in which two or more Shop franchises are located as a region for the purpose of establishing an Advertising Cooperative. If Franchisee's Shop or Designated Territory is located within the geographic area of an Advertising Cooperative, franchisee must participate in and contribute to the Advertising Cooperative. Franchisee agrees to the following:
- (1) If Franchisor previously instituted or, in the future, institutes an Advertising Cooperative that includes, in whole or in part, Franchisee's Designated Territory or Franchisee's Shop Location, Franchisee shall participate in and make such on-going financial contributions to the Advertising Cooperative, as determined by the Advertising Cooperative;
- (2) Franchisor may establish foundational and organizational requirements of the Advertising Cooperative including voting provisions that allows the Advertising Cooperative to make decisions based on the simple majority vote (1 vote per franchisee Shop located within the designated area of the Advertising Cooperative) with a quorum constituting 25% of those franchisees within the Advertising Cooperative;
- (3) Unless otherwise authorized and approved by Franchisor in writing, each Advertising Cooperative shall be organized for the exclusive purpose of administering marketing programs and the development of media (all subject to the review and approval of Franchisor) for use by members of the Advertising Cooperative in local or regional marketing;
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, a franchisee's participation in the Advertising Cooperative is determined by the franchisor. Bang Cookies possesses the right to authorize, establish, designate, and de-authorize local or regional advertising cooperatives within designated markets. If a franchisee's shop or designated territory falls within the geographic area of an Advertising Cooperative, participation is mandatory.
Specifically, if Bang Cookies institutes an Advertising Cooperative that includes the franchisee's designated territory or shop location, the franchisee must participate and contribute financially as determined by the cooperative. The franchisor also establishes foundational and organizational requirements, including voting provisions, where decisions are made by a simple majority vote (one vote per shop) with a quorum of 25% of franchisees within the cooperative.
If an Advertising Cooperative already exists when the Franchise Agreement is executed, or if one is established during the term of the agreement, the franchisee must fully participate. At the franchisor's request, the franchisee must execute all required documents to become a member, adhering to the cooperative's terms. The franchisee's contributions to the Advertising Cooperative will count toward fulfilling their minimum local marketing obligations as outlined in the Franchise Agreement, but cannot exceed those obligations.