Is Bojangles required to establish regional cooperative advertising organizations?

eg)

Cooperative Advertising.

We have the right to require you to participate along with other franchisees in regional cooperative advertising organizations or programs established currently or in the future by us or other franchisees for the purpose of advertising and promoting the Bojangles System. Each cooperative must be organized and must operate from a written governing document, the Advertising Expense Sharing Agreement (the general form of which is attached as Exhibit F to this disclosure document, however, we may modify this form for a Restaurant in a DMA in which we have company-operated Restaurants) (the "Expense Sharing Agreement"). Except as otherwise provided below, at the time you execute a Franchise Agreement or Individual Franchise Agreement or Bojangles Express Franchise Agreement, you will be required to execute the Expense Sharing Agreement.

Each Expense Sharing Agreement establishes a DMA membership composed of (1) franchisees owning a Restaurant(s) within a particular DMA, (2) each franchisee that is a franchisee upon the date of execution of the Expense Sharing Agreement and who may have elected to become a member of a particular DMA under specific provisions in the Expense Sharing Agreement allowing that election, and (3) us and our affiliates as to each DMA in which we own a Restaurant. A DMA is a geographical area designated as a television Designated Market Area by the Nielsen Ratings Company. (For purposes of radio advertising, this geographical area is designated as a radio area of dominant influence or ADI by Nielsen Audio.) An "Eligible DMA" is a DMA with two or more members.

The following provisions apply generally to cooperatives:

• 1. Each cooperative will elect a chairman who has the authority to call and conduct meetings, to collect contributions from members and deposit the funds, as trustee, in a bank account and to have signature authority over such funds, to bring collection actions to collect delinquent contributions and to perform general administrative and accounting functions. The chairman may be elected for one year or until his successor has been duly elected. A majority vote of the membership may remove the chairman at any time.
• 1. The membership of the cooperative may periodically designate or appoint an individual or committee to supervise or to conduct the advertising functions for the cooperative. The membership may employ an advertising agency or individual for a period not greater than one year to carry out some or all of the advertising functions for the cooperative. A vote of 51% of the membership present and voting at an annual or special meeting of the cooperative will be required for such employment or for extending the term of the employment beyond one year; however, in some markets in which there are pre-existing franchised Restaurants, cooperative arrangements with new franchisees may require 85% of the votes.
• 1. Upon each question that may come before the membership for vote, each member shall be entitled to one vote for each Restaurant owned by that member and located within the DMA or transferred franchisee into the DMA by election under specific provisions of the Expense Sharing Agreement. All matters voted on require a majority vote of the members unless provided otherwise in the Expense Sharing Agreement.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 37–49)