What is a 'Cooperative' in the context of a Beggars Pizza franchise?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
We may designate any geographical area for purposes of establishing a regional advertising and promotional cooperative (a "Cooperative") in our discretion and determine whether a Cooperative is applicable to the Restaurant. If a Cooperative has been established in your area before you open the Restaurant, you must become a member of the Cooperative no later than 30 days after opening the Restaurant. If a Cooperative is established after you open the Restaurant, you must become a member of the Cooperative no later than 30 days after the date on which the Cooperative begins operation. If the Restaurant is within the territory of more than one Cooperative, you will not be required to be a member of more than one Cooperative within that territory. (Franchise Agreement, Section 12.10.)
Each Cooperative will be organized for the exclusive purpose of administering local and/or regional advertising programs and developing standardized advertising materials for use by the members in local advertising subject to our approval. No promotional or advertising plans or materials may be used by a Cooperative or furnished to its members without our approval. Each Cooperative may require its members to make contributions to the Cooperative in an amount determined by the Cooperative up to a maximum of 2% of Gross Sales during any calendar year, unless two-thirds of the members of the Cooperative vote in favor of a greater contribution. Any payments you make to the Cooperative will be credited towards your required local advertising expenditure.
We will have the power to require any Cooperative to be formed, changed, dissolved, or merged.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 19–26)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, an advertising cooperative, or "Cooperative," is a regional advertising and promotional group that Beggars Pizza may establish at its discretion. If Beggars Pizza determines that a Cooperative is applicable to a franchisee's restaurant, the franchisee must become a member. If a Cooperative is already in place when the restaurant opens, the franchisee has 30 days after opening to join. If a Cooperative is established after the restaurant opens, the franchisee has 30 days from the start of the Cooperative's operation to become a member. If a restaurant falls within the territory of multiple Cooperatives, membership in only one is required.
The purpose of each Cooperative is to manage local or regional advertising programs and create standardized advertising materials for its members, subject to Beggars Pizza's approval. Neither the Cooperative nor its members can use any promotional or advertising plans or materials without Beggars Pizza's approval.
Cooperatives can require members to contribute funds, with the amount determined by the Cooperative, up to a maximum of 2% of the restaurant's Gross Sales per calendar year. However, a contribution exceeding 2% can be mandated if two-thirds of the Cooperative members vote in favor. Any payments made to the Cooperative will be credited toward the franchisee's required local advertising expenditure. Beggars Pizza retains the authority to form, change, dissolve, or merge any Cooperative.