What financial statements are required to be prepared annually by a Beard Papas advertising cooperative?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
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, if a local or regional advertising cooperative is established and includes a franchisee's shop, the franchisee must contribute to the cooperative as determined by the cooperative members. These members are responsible for administering the cooperative, including deciding on contribution amounts, marketing expenditures, and allocations. Beard Papas may require cooperative decisions to be based on a simple majority vote of franchisee members, with one vote per shop and a quorum of at least 25% of the designated franchisee cooperative members. If a cooperative has more than nine franchisee members, Beard Papas may require the establishment of formal governing documents.
Each advertising cooperative must prepare annual unaudited financial statements. These financial statements must be provided to each cooperative member for review. Beard Papas retains the right to form, change, dissolve, or merge any advertising cooperative. If Beard Papas forms a local or regional cooperative, or if one already exists in the area of a franchisee's shop, the franchisee is required to participate in the cooperative according to the operations manual, which may be supplemented and modified. Franchisees will not be required to contribute more than the local marketing requirements to a Local or Regional Advertising Cooperative.
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 currently, franchisees are not required to participate in or contribute to any advertising cooperative. However, this could change in the future, and franchisees should be prepared to participate if required.