If a local or regional advertising cooperative is established by Beard Papas, is a franchisee required to participate?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
shall not exceed $500 per month.
Note 9: 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 shall count toward satisfaction of your minimum local marketing obligations and shall not exceed the local marketing requirements.
ITEM 7 ESTIMATED INITIAL INVESTMENT
YOUR ESTIMATED INITIAL INVESTMENT
A. Franchise Agreement: Stand-Alone Shop Location
| Amount | Method of Payment | When Due | To Whom Payment is Made | |
|---|---|---|---|---|
| Initial Franchise Fee | $45,000 | Lump sum | When Franchise | Us |
| (Note 1) | Agreement is signed | |||
| Construction and | $35,000 – $150,000 | As arranged | As incurred | Contractors, |
| Leasehold | suppliers, and/or | |||
| Improvements (Note 2) | landlord | |||
| Lease Deposits and | $18,000 – $96,000 | As arranged | As incurred | Landlord |
| Rent – Three Months | ||||
| (Note 3) | ||||
| Ovens (Note 4) |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, if Beard Papas establishes a local or regional advertising cooperative within a designated market that includes a franchisee's shop, the franchisee is required to participate in the cooperative. The franchisee must make ongoing payments to the cooperative, with the amounts and caps determined by the cooperative members.
Each Beard Papas shop franchisee within the cooperative market has one vote per shop. Cooperative decisions are made based on a simple majority vote, requiring a quorum of at least 25% of the designated cooperative members. This structure ensures that franchisees have a voice in the cooperative's decisions, although the franchisor, Beard Papas, initiates the cooperative's formation.
Contributions to a local or regional cooperative designated by Beard Papas count toward satisfying the franchisee's minimum local marketing obligations. These contributions will not exceed the local marketing requirements, meaning that participation in the cooperative substitutes for, rather than adds to, the franchisee's existing local marketing responsibilities. This provides a structured approach to local advertising, potentially leveraging the collective resources of multiple franchisees for greater impact.
Currently, the fees for local and regional advertising cooperatives are not assessed, but if implemented, they are established by the cooperative members. These fees will count toward the satisfaction of the Franchisee Directed Local Marketing Requirements and will not exceed the local marketing requirements. The Franchisee Directed Local Marketing requires the franchisee to spend 2% of gross sales on local marketing.