Under what conditions can Bang Cookies require participation in a local or regional advertising cooperative?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Note 7: Local and Regional Advertising Cooperatives – If two or more Shops are operating within a geographic area, region, or market designated by us (a "designated market"), we reserve the right to establish and require your participation in a local or regional advertising cooperative within the designated market. If a local or regional advertising cooperative is established within a designated market that includes your Shop(s), you will be required to participate in the cooperative and make on-going payments to the cooperative in such amounts and subject to such caps as established by the cooperative members. We anticipate that each Shop franchisee will have one vote for each Shop located within the cooperative market and that cooperative decisions shall be made based on approval of a simple majority vote with a quorum of not less than 25% of the designated cooperative members. Contributions to a local or regional cooperative that we designate will count toward satisfaction of your minimum local marketing requirements.
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, Bang Cookies reserves the right to establish and require franchisee participation in a local or regional advertising cooperative. This can occur if two or more Bang Cookies shops are operating within a geographic area, region, or market that Bang Cookies designates as a "designated market."
If such a cooperative is established, franchisees within the designated market are required to participate and make ongoing payments to the cooperative. The amounts and any caps on these payments are determined by the cooperative members themselves. Each Bang Cookies shop franchisee will have one vote for each shop they operate within the cooperative market. Decisions are made by a simple majority vote, provided that at least 25% of the designated cooperative members are present to form a quorum.
Contributions made to a local or regional cooperative that Bang Cookies designates can be used to satisfy the franchisee's minimum local marketing requirements. This means that the money spent on the cooperative can count towards the 2% of quarterly gross sales that franchisees are required to spend on local marketing.