Under what circumstances might Beauty Bungalows establish a Marketing Cooperative?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
We may establish a Marketing Cooperative in a geographic area in which two or more Beauty Bungalows are located. The Marketing Cooperative's members include all Beauty Bungalows franchises operating in the geographic area, including those operated by us and our affiliates, if applicable. We may require you to join a Marketing Cooperative existing or established in a geographic area encompassing your Beauty Bungalows franchise. We will determine how any Marketing Cooperative is organized and governed, but the Marketing Cooperative's members are responsible for its administration and determination of contribution levels, provided your required contribution to the Marketing Cooperative will not exceed 2% of your Beauty Bungalows Franchise's location's monthly Gross Revenue. Each Marketing Cooperative will operate under written governing documents prepared by us or our designee. Such documentation will be made available to members of the Marketing Cooperative upon reasonable request. Marketing Cooperatives will prepare an annual unaudited financial statement and make it available to members upon reasonable request. All material decisions of the Marketing Cooperative, including contribution levels, will require the affirmative vote of at least 51% of all Beauty Bungalows operating within the Marketing Cooperative's area (including those that we and our affiliates operate, if any), with each Beauty Bungalows franchisee group receiving one vote. We may form, modify, change, dissolve, or merge Marketing Cooperatives. Funds contributed to a Marketing Cooperative will not be utilized to solicit new franchise sales. Any fees you pay to a Marketing Cooperative will count towards your Local Area Marketing Requirement, though the fees imposed by the Marketing Cooperative may exceed your required Local Area Marketing Requirement obligation.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 23–30)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, a Marketing Cooperative may be established in a geographic area where two or more Beauty Bungalows franchises are located. This includes franchises operated by Beauty Bungalows itself or its affiliates, if applicable. Beauty Bungalows has the authority to require franchisees to join a Marketing Cooperative if one exists or is established in their area.
The purpose of the Marketing Cooperative is to facilitate regional advertising and marketing efforts. While Beauty Bungalows determines the organization and governance of the cooperative, the members themselves are responsible for its administration and for deciding on contribution levels. However, the franchisee's contribution cannot exceed 2% of their Beauty Bungalows location's monthly Gross Revenue.
All material decisions, including contribution levels, require approval by at least 51% of all Beauty Bungalows operating within the cooperative's area, with each franchisee group receiving one vote. Beauty Bungalows retains the right to form, modify, dissolve, or merge these Marketing Cooperatives. Funds contributed to a Marketing Cooperative cannot be used to solicit new franchise sales, and fees paid to the cooperative count towards the franchisee's Local Area Marketing Requirement, even if those fees exceed the required obligation.