Can Beard Papas dissolve an advertising cooperative?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
- Local and Regional Advertising Cooperative – We possess the exclusive right to authorize, establish, designate and de-authorize a local or regional advertising cooperative within those markets that we designate. We will exclusively determine the geographic and other boundaries constituting each respective cooperative and factors that we will consider include media markets including print, television and digital. If we establish a cooperative within a market that includes your Shop you must contribute to the cooperative in such amounts and frequency as determined by the cooperative. Members of the cooperative will be responsible for administering the cooperative, including determining the amount of contributions, marketing expenditures and allocations. However, we may require that cooperative decisions be made based on approval of a simple majority of franchisee members based on one vote per Shop located and a quorum of not less than 25% of the designated franchisee cooperative members. If a cooperative exceeds nine franchisee members, we may require that the cooperative establish formal governing documents. Each cooperative must prepare annual unaudited financial statements that must be provided to each cooperative member for review. We reserve the right to form, change, dissolve, or merge any advertising cooperative. If we elect to form a local or regional cooperative or if a cooperative already exists as to the area of your Shop, you will be required to participate in the cooperative in accordance with the provisions of our operations manual which we may supplement and modify from time to time. You will not be required to make contributions to a Local or Regional Advertising Cooperative in amounts exceeding the local marketing requirements.
As of December 31, 2024, we have not established any local or regional advertising cooperatives but reserve the right to do so in the future; and
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 31–38)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, Beard Papas reserves the right to dissolve any advertising cooperative. The document states that Beard Papas possesses the exclusive right to authorize, establish, designate, and de-authorize a local or regional advertising cooperative within designated markets. This gives Beard Papas significant control over the advertising cooperatives.
If Beard Papas establishes a cooperative in a market that includes a franchisee's shop, the franchisee must contribute to the cooperative in amounts and frequency determined by the cooperative. While members of the cooperative are responsible for administering it, Beard Papas may require that cooperative decisions be based on approval of a simple majority of franchisee members with one vote per shop, provided a quorum of not less than 25% of the designated franchisee cooperative members is present. If a cooperative exceeds nine franchisee members, Beard Papas may require that the cooperative establish formal governing documents.
Franchisees are required to participate in the cooperative if one exists in their area, according to the operations manual, which Beard Papas may modify. However, franchisees will not be required to contribute more than the local marketing requirements. As of December 31, 2024, Beard Papas had not established any local or regional advertising cooperatives but reserves the right to do so in the future. This means that while franchisees may be required to participate and contribute to a cooperative if one is established, Beard Papas retains the ultimate authority to dissolve or change these cooperatives.