Who has the right to attend meetings and approve the governing rules and procedures of a Bhc advertising cooperative?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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, while the members of each advertising cooperative adopt governing rules and voting procedures, Bhc retains significant oversight. Bhc has the right to attend any meetings of the cooperative. More importantly, Bhc has the right to approve the cooperative's rules and procedures, as well as any amendments to those rules.
This means that while franchisees participating in the cooperative can propose and vote on rules, Bhc ultimately has the final say. This ensures that the cooperative's activities align with Bhc's overall marketing and branding strategies. It also gives Bhc the power to ensure fair practices and prevent any misuse of funds or resources within the cooperative.
Furthermore, if any of Bhc's affiliates owns a Bhc Restaurant within the cooperative's boundaries, the affiliate will contribute to the cooperative at the lowest percentage contribution rate paid by any Bhc franchisee in that cooperative. The affiliate also has the same voting rights as franchisee members. This arrangement ensures that company-owned stores are integrated into the advertising efforts while maintaining equitable contribution and voting rights.
Bhc also retains the right to modify the boundaries of advertising cooperative groups with written notice, require a cooperative to merge with another, subdivide a cooperative, or dissolve a cooperative when all advertising cooperatives are dissolved. This gives Bhc considerable control over the structure and operation of these advertising cooperatives, and the company may determine it is preferable to centralize all group advertising activities under the Marketing and Promotion Fee.