factual

If Better Blend's own outlets are members of a cooperative, do they contribute and vote on the same basis as franchisees?

Better_Blend Franchise · 2024 FDD

Answer from 2024 FDD Document

Local or Regional Advertising Cooperatives. We do not currently have any local or regional advertising cooperatives. We have the right to require you to participate in a local or regional advertising cooperative. We will define the area of the cooperative based on media markets, or other geographic criteria that we deem appropriate. Each franchisee in the area would have one vote per outlet (unless the franchisee is in default under its franchise agreement). The amount you must contribute to the cooperative will be determined by vote of the members, but not less than 1% and not more than 5% of adjusted gross sales. If our own outlets are members of a cooperative, they must contribute to the cooperative on the same basis as franchisees, and they will vote on the same basis as other members. We administer the cooperative, but we have the right to delegate responsibility for administration to an outside company such as an advertising agency or accounting firm, or to the franchisee members of the cooperative. We have the right to require the cooperative to operate from written bylaws or other governing documents that we determine. The documents are not currently available for you to review. Cooperatives will prepare annual financial statements which will be made available for review only by us and by the members of the cooperative. We have the power to require cooperatives to be formed, changed, dissolved, or merged.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 21–27)

What This Means (2024 FDD)

According to Better Blend's 2024 Franchise Disclosure Document, if Better Blend's own outlets are members of a local or regional advertising cooperative, they must contribute to the cooperative on the same basis as franchisees. Additionally, they will vote on the same basis as other members. Each franchisee has one vote per outlet unless they are in default under their franchise agreement.

The amount franchisees must contribute to the cooperative will be determined by a vote of the members, but it will not be less than 1% and not more than 5% of adjusted gross sales. Better Blend retains the right to require franchisees to participate in a local or regional advertising cooperative and will define the cooperative's area based on media markets or other geographic criteria they deem appropriate.

Better Blend also administers the cooperative but has the right to delegate this responsibility to an outside company or to the franchisee members of the cooperative. The franchisor can require the cooperative to operate from written bylaws or other governing documents. Cooperatives will prepare annual financial statements, which will be available for review only by Better Blend and the members of the cooperative. Better Blend also has the power to require cooperatives to be formed, changed, dissolved, or merged.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.