For Bang Cookies, who has the right to designate any geographic area as a region for establishing an Advertising Cooperative?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
At all times Franchisor, 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;
(4) If at the time of execution of this Agreement an Advertising Cooperative has been established for a geographic area that includes, in whole or in part, Franchisee's Shop location or Designated Territory, or if such Advertising Cooperative is established during the Term of this Agreement, Franchisee shall fully participate in the Advertising Cooperative and Franchisee shall execute, at the request of Franchisor, all documents required by Franchisor and Franchisee shall become a member of the Advertising Cooperative subject to the terms of those documents;
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, the franchisor has the authority to designate geographic areas for Advertising Cooperatives. Bang Cookies possesses the sole and exclusive right to designate any geographic area in which two or more Shop franchises are located as a region for establishing an Advertising Cooperative. This means that Bang Cookies can create advertising cooperatives in areas where multiple franchise locations exist.
If a franchisee's shop or designated territory falls within the area of an Advertising Cooperative, the franchisee is required to participate in and contribute to the cooperative. The amount of financial contribution is determined by the Advertising Cooperative itself.
Bang Cookies also has the power to establish the foundational and organizational requirements of the Advertising Cooperative, including voting provisions. These provisions allow the Advertising Cooperative to make decisions based on a simple majority vote, with one vote per franchisee shop, provided that a quorum of 25% of the franchisees within the Advertising Cooperative is present. This ensures that Bang Cookies maintains control over the structure and decision-making processes of the cooperative, while also giving franchisees a voice.
Each Advertising Cooperative must be organized exclusively for administering marketing programs and developing media, all of which are subject to review and approval by Bang Cookies. This requirement ensures that all marketing efforts align with the brand's overall strategy and standards. Franchisees must participate fully in the Advertising Cooperative and execute all required documents if an Advertising Cooperative is established for their area, either at the time of the agreement or during its term.