Can Bhc establish advertising cooperatives comprised of groups of franchisees?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
We may establish advertising cooperatives comprised of groups of franchisees within regions or areas we designate and may modify boundaries of these groups in our discretion, effective on written notice.
You, your Affiliate Franchisee, and your Subfranchisees must participate in any advertising cooperative which encompasses your, your Affiliate Franchisee's, or your Subfranchisees' territory.
The members of each cooperative will adopt governing rules and voting procedures and determine procedures for assessing members; however, we have the right to attend any meetings and approve these rules and procedures and any amendments.
If any of our affiliates owns a BHC Restaurant within the boundaries of a cooperative, it will contribute to the cooperative at the lowest percentage contribution rate that any BHC franchisee in the same cooperative then pays and will have the same voting rights as franchisee members.
- (viii) We may require a cooperative to merge with another cooperative servicing an adjacent or proximate area, or to subdivide a cooperative into smaller groupings.
We may dissolve a cooperative when we simultaneously dissolve all advertising cooperatives.
For example, we may determine it is preferable to centralize all group advertising activities under the Marketing and Promotion Fee.
Advertising cooperatives must prepare quarterly and annual financial statements, which need not be audited, and make them available to all cooperative members and us.
We have no present plan to sell goods or services to any advertising cooperative.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, And Training (FDD pages 29–38)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, Bhc has the right to establish advertising cooperatives comprised of groups of franchisees within designated regions or areas, and may modify the boundaries of these groups with written notice. Franchisees, Affiliate Franchisees, and Subfranchisees must participate in any advertising cooperative that includes their territory.
The members of each cooperative will create governing rules, voting procedures, and member assessment procedures. However, Bhc retains the right to attend meetings and approve these rules, procedures, and any amendments. If any of Bhc's affiliates owns a Bhc Restaurant within a cooperative's boundaries, it will contribute to the cooperative at the lowest percentage contribution rate paid by any Bhc franchisee in the same cooperative and will have the same voting rights as franchisee members.
Bhc may require a cooperative to merge with another cooperative servicing an adjacent or proximate area, or to subdivide a cooperative into smaller groupings. Bhc may dissolve a cooperative when it simultaneously dissolves all advertising cooperatives, potentially centralizing all group advertising activities under the Marketing and Promotion Fee. Advertising cooperatives must prepare quarterly and annual financial statements, which need not be audited, and make them available to all cooperative members and Bhc. Bhc currently has no plans to sell goods or services to any advertising cooperative.