Does Better Blend have the power to require cooperatives to be formed, changed, dissolved, or merged?
Better_Blend Franchise · 2024 FDDAnswer 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, Better Blend has the authority to mandate the formation, alteration, dissolution, or merging of advertising cooperatives. These cooperatives, if established, would operate within areas defined by Better Blend based on media markets or other geographic criteria they deem suitable. Each franchisee within the designated area would have one vote per outlet, provided they are not in default of their franchise agreement.
The amount each franchisee contributes to the cooperative will be determined by a vote of the members, with contributions ranging from 1% to 5% of adjusted gross sales. If Better Blend's own outlets are part of a cooperative, they are required to contribute on the same basis as franchisees and will have the same voting rights. Better Blend retains the right to administer the cooperative or delegate this responsibility to an outside entity, such as an advertising agency, accounting firm, or the franchisee members themselves.
Better Blend also has the power to require the cooperative to operate under written bylaws or other governing documents that Better Blend determines. These documents are not currently available for franchisee review. The cooperatives are required to prepare annual financial statements, which will be accessible for review by Better Blend and the cooperative members. This structure gives Better Blend significant control over the advertising efforts and financial operations of these cooperatives, should they be established.