Does Better Blend have the right to require the cooperative to operate from written bylaws or other governing documents?
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 right to require any local or regional advertising cooperative to operate under written bylaws or other governing documents that Better Blend determines. These documents are not available for franchisee review at the time of the FDD.
Better Blend also has the power to require these cooperatives to be formed, changed, dissolved, or merged. The cooperatives will be responsible for preparing annual financial statements, but these statements will only be available for review by Better Blend and the members of the cooperative.
Better Blend, or a delegated outside company, administers the cooperative. Each franchisee has one vote per outlet, unless they are in default of their franchise agreement. Franchisees must contribute between 1% and 5% of adjusted gross sales to the cooperative, as determined by a vote of the members. If Better Blend owns outlets that are members of the cooperative, they must contribute on the same basis as franchisees and vote on the same basis as other members.