What obligations does a Bang Cookies franchisee have regarding 'Advertising Contributions'?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
(5) Franchisee shall contribute to the Advertising Cooperative in the amounts as determined and required by the Advertising Cooperative or, otherwise in accordance with those documents governing the operation of the Advertising Cooperative; provided, however, Franchisee's contributions to the Advertising Cooperative shall not exceed Franchisee's local minimum marketing obligations set forth in Article 9.B. of this Agreement and Franchisee's contributions to the Advertising Cooperative shall count toward satisfaction of Franchisee's minimum local marketing obligations set forth in Article 9.B.;
(6) Franchisee shall submit to the Advertising Cooperative and to Franchisor such statements and reports as may be required by the Advertising Cooperative and approved by Franchisor.
All contributions to the Advertising Cooperative shall be maintained and administered in accordance with the documents governing the Advertising Cooperative.
The Advertising Cooperative shall be operated solely for the purpose of collection and expenditure of the Advertising Cooperative's fees for the purpose set forth in this Article 9.F.;
(7) No marketing materials, plans, or media may be used by the Advertising Cooperative or its members without the prior written approval of Franchisor;
(8) Shops owned by Franchisor and/or Franchisor's affiliates that are located within the geographic area of the designated Advertising Cooperative are not required to make contributions to the Advertising Cooperative; and
(9) The Advertising Cooperative must comply with the rules and regulations established by Franchisor in the operations manual which may be modified by Franchisor from time to time.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, franchisees have specific obligations regarding advertising contributions, primarily related to an Advertising Cooperative. Franchisees must contribute to the Advertising Cooperative in amounts determined and required by the cooperative itself or as outlined in the cooperative's governing documents. However, these contributions cannot exceed the franchisee's local minimum marketing obligations as detailed in Article 9.B of the Franchise Agreement, and any contributions made to the Advertising Cooperative count towards fulfilling these minimum local marketing obligations. This means Bang Cookies franchisees are required to participate in broader advertising efforts through the cooperative, but their financial commitment is capped by their local marketing requirements.
Franchisees are also obligated to submit statements and reports to both the Advertising Cooperative and Bang Cookies, as required by the cooperative and approved by Bang Cookies. All contributions to the Advertising Cooperative must be managed according to the cooperative's governing documents, and the cooperative's sole purpose is to collect and spend fees for advertising purposes as defined in Article 9.F. This ensures transparency and accountability in how advertising funds are managed and utilized.
Furthermore, the FDD states that neither the Advertising Cooperative nor its members can use any marketing materials, plans, or media without Bang Cookies' prior written approval. Bang Cookies also retains the right to modify the rules and regulations of the Advertising Cooperative as outlined in the operations manual. These stipulations ensure that all advertising efforts align with Bang Cookies' brand standards and marketing strategies. However, Bang Cookies-owned shops or those owned by its affiliates within the cooperative's geographic area are not required to contribute to the Advertising Cooperative, which may create an uneven playing field for franchisees in those areas.