What is a 'Cooperative' as it relates to Beggars Pizza advertising?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
nchisor is not obliged to compensate Franchisee or Franchisee's employees for use of the Restaurant or Franchisee's employees in any advertising or promotional materials. Franchisee must cooperate in securing the consent of persons photographed for such use.
12.10 Advertising Cooperative. Franchisor may designate any geographical area for the purposes of establishing a regional advertising and promotional cooperative ("Cooperative") and determine whether a Cooperative is applicable to the Restaurant in Franchisor's discretion. If a Cooperative has been established applicable to the Restaurant at the time Franchisee commences operations, Franchisee must immediately become a member of the Cooperative. If a Cooperative applicable to the Restaurant is established at any later time during the term of the Agreement, Franchisee must become a member of such Cooperative no later than thirty (30) days after the date on which the Cooperative commences operation. If the Restaurant is within the territory of more than one Cooperative, Franchisee will be required to be a member of only one Cooperative:
12.10.1 Each Cooperative will be organized and governed in a form and manner, will commence operation on a date approved by Franchisor, and will operate pursuant to written governing documents, all of which must be approved in advance by Franchisor in writing.
12.10.2 Each Cooperative will be organized for the exclusive purpose of administering regional advertising programs and developing, subject to Franchisor's approval, standardized advertising materials for use by the members in local advertising.
12.10.3 No promotional or advertising plans or materials may be used by a Cooperative or furnished to its members without the prior approval of Franchisor. All such plans and materials must be submitted to Franchisor in accordance with the procedure set forth in Section 12.7.
12.10.4 Each Cooperative may require its members to make contributions to the Cooperative in such amounts as determined by the Cooperative; provided, however, that Franchisee will not be required to contribute to any Cooperative in excess of two percent (2%) of Gross Sales during any calendar year, unless two-thirds of the members of the Cooperative vote in favor of a greater contribution. Franchisee's payments made under this Section 12.10.4 will be credited towards the expenditure required to be made under Section 12.2.
12.10.5 Each member franchisee will submit to the Cooperative the amount invoiced by the Cooperative or Franchisor, as described in Section 4.5, its contribution as provided in Section 12.10.4, together with such other statements or reports as may be required by Franchisor or by the Cooperative with Franchisor's prior approval.
12.10.6 Franchisor, in its sole discretion, may grant to any franchisee an exemption for any length of time from the requirement of membership in a Cooperative, upon written request of such franchisee stating the reasons supporting such exemption. Franchisor's decision concerning such request for exe
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Beggars Pizza Franchise Disclosure Document, an advertising cooperative (Cooperative) is a regional advertising and promotional entity that Beggars Pizza may establish for a specific geographical area. Beggars Pizza determines whether a Cooperative is applicable to a restaurant at its discretion. If a Cooperative is established for a Beggars Pizza location, the franchisee must become a member. If a Cooperative is established after the franchise begins operation, the franchisee has 30 days to join after the Cooperative commences operation. If a Beggars Pizza restaurant is within the territory of multiple Cooperatives, the franchisee is only required to join one.
Each Cooperative is organized and governed in a manner approved by Beggars Pizza, operating under written documents also approved by Beggars Pizza. The exclusive purpose of the Cooperative is to manage regional advertising programs and develop standardized advertising materials for local advertising, subject to Beggars Pizza's approval. No promotional or advertising plans or materials can be used by the Cooperative or provided to its members without Beggars Pizza's prior approval.
Cooperatives can require members to contribute funds, but a franchisee's contribution cannot exceed 2% of Gross Sales in a calendar year unless two-thirds of the Cooperative members vote for a higher contribution. Payments made to the Cooperative count toward the franchisee's required advertising expenditure. Franchisees must submit their contribution, as invoiced by the Cooperative or Beggars Pizza, along with any statements or reports required by Beggars Pizza or the Cooperative with Beggars Pizza's approval.
Beggars Pizza has the discretion to grant a franchisee an exemption from Cooperative membership, requiring the franchisee to spend the full advertising amount locally. Beggars Pizza also has the power to change, dissolve, or merge Cooperatives as it sees fit. This gives Beggars Pizza significant control over the advertising and marketing efforts of its franchisees, ensuring brand consistency and potentially leveraging economies of scale in advertising spend.