If a regional advertising cooperative is established for Baya Bar, what is the franchisee's obligation regarding membership?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 13.4 Regional Advertising.
Franchisor reserves the right to establish, in Franchisor's sole discretion, a regional advertising cooperative.
If a regional cooperative is established during the term of this Agreement, Franchisee agrees to sign all documents Franchisor requests to become a member of the cooperative according to the terms of the documents.
If Franchisor establishes a regional cooperative, Franchisee agrees to contribute amounts equal to Franchisee's share of the total cost of cooperative advertising, in addition to required Brand Fund Contributions.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, if Baya Bar establishes a regional advertising cooperative, franchisees must sign all documents requested by Baya Bar to become a member, adhering to the terms outlined in those documents. Franchisees are also obligated to contribute their share of the total cost of cooperative advertising, in addition to the required Brand Fund contributions.
This means that franchisees do not have a choice regarding membership in a regional advertising cooperative if Baya Bar decides to establish one. They must join and comply with the cooperative's rules. This could involve additional financial contributions beyond the standard brand fund fees, impacting the franchisee's marketing budget and overall expenses.
It is important for prospective franchisees to understand that these regional advertising cooperatives are at Baya Bar's discretion. Franchisees should inquire about the potential costs and obligations associated with regional advertising cooperatives to fully assess the financial implications of this requirement.