conditional

Under what conditions is a Bang Cookies franchisee required to participate in an Advertising Cooperative?

Bang_Cookies Franchise · 2024 FDD

Answer from 2024 FDD Document

nd all future dates demanded by Franchisor, Franchisee shall execute and deliver to Franchisor the Assignment of Telephone Numbers and Digital Media Accounts Agreement attached to this Agreement as Exhibit 6. Franchisee agree that the foregoing shall not be interpreted or construed as permitting Franchisee to establish, designate, utilize and/or otherwise establish accounts as to Digital Media respecting and/or concerning the Franchised Business and/or the System.

9.F. ADVERTISING COOPERATIVE

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;
  • (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;

Source: Item 23 — RECEIPTS (FDD pages 56–245)

What This Means (2024 FDD)

According to Bang Cookies's 2024 Franchise Disclosure Document, a franchisee is required to participate in an Advertising Cooperative if their Shop or Designated Territory is located within the geographic area of a designated Advertising Cooperative. Bang Cookies retains the sole right to designate any geographic area with two or more Shop franchises as a region for establishing an Advertising Cooperative.

If an Advertising Cooperative is instituted that includes the franchisee's Designated Territory or Shop Location, the franchisee must participate and make ongoing financial contributions as determined by the cooperative. The franchisor may establish 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.

Each Advertising Cooperative is organized to administer marketing programs and develop media, subject to Bang Cookies's review and approval. If an Advertising Cooperative exists at the time of the agreement or is established during the term, the franchisee must fully participate and execute all required documents to become a member. Franchisee contributions to the Advertising Cooperative cannot exceed the franchisee's local minimum marketing obligations as detailed in Article 9.B of the Franchise Agreement, and these contributions count toward fulfilling those minimum local marketing obligations.

It's important to note that Bang Cookies Shops owned by the franchisor or its affiliates within the Advertising Cooperative's geographic area are not required to contribute to the cooperative. All marketing materials, plans, or media used by the cooperative or its members must receive prior written approval from Bang Cookies. The Advertising Cooperative must also comply with the rules and regulations established by Bang Cookies in the operations manual, which may be modified from time to time.

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.