Under what condition is a Beard Papas franchisee required to participate in an Advertising Cooperative?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
- (1) If Franchisor previously instituted or, in the future, institutes an Advertising Cooperative that includes, in whole or in part, Franchisee's Designated Territory or Franchisee's Shop Location, Franchisee shall participate in and make such on-going financial contributions to the Advertising Cooperative, as determined by the Advertising Cooperative;
- (2) Franchisor may establish foundational and organizational requirements of the Advertising Cooperative including voting provisions that allows the Advertising Cooperative to make decisions based on the simple majority vote (one vote per franchisee Shop located within the designated area of the Advertising Cooperative) with a quorum constituting 25% of those franchisees within the Advertising Cooperative;
- (3) Unless otherwise authorized and approved by Franchisor in writing, each Advertising Cooperative shall be organized for the exclusive purpose of administering marketing programs and the development of media (all subject to the review and approval of Franchisor) for use by members of the Advertising Cooperative in local or regional marketing;
- (4) If at the time of execution of this Agreement an Advertising Cooperative has been established for a geographic area that includes, in whole or in part, Franchisee's Shop location or Designated Territory, or if such Advertising Cooperative is established during the Term of this Agreement, Franchisee shall fully participate in the Advertising Cooperative and Franchisee shall execute, at the request of Franchisor, all documents required by Franchisor and Franchisee shall become a member of the Advertising Cooperative subject to the terms of those documents;
- (5) Franchisee shall contribute to the Advertising Cooperative in the amounts as determined and required by the Advertising Cooperative or, otherwise in accordance with those documents governing the operation of the Advertising Cooperative; provided, however, Franchisee's contributions to the Advertising Cooperative shall not exceed Franchisee's local minimum marketing obligations set forth in Article 9.B. of this Agreement and Franchisee's contributions to
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, a franchisee is required to participate in an Advertising Cooperative under specific conditions related to their territory and shop location. If Beard Papas previously established or establishes an Advertising Cooperative that includes the franchisee's designated territory or shop location, the franchisee must participate in the cooperative. This participation includes making ongoing financial contributions as determined by the Advertising Cooperative.
The FDD also states that if an Advertising Cooperative already exists for a geographic area that includes the franchisee's shop location or designated territory at the time the franchise agreement is executed, or if such a cooperative is established during the term of the agreement, the franchisee must fully participate in it. This involves executing all required documents and becoming a member of the Advertising Cooperative, subject to its terms.
The franchisee's contributions to the Advertising Cooperative are determined and required by the cooperative itself. However, the franchisee's contributions to the Advertising Cooperative cannot exceed the franchisee's local minimum marketing obligations as outlined in the franchise agreement. Furthermore, these contributions count toward fulfilling the franchisee's minimum local marketing obligations.