Does Bombs Away currently have an advertising council composed of franchisees?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
Advertising council. We do not have an advertising council composed of franchisees. The franchise agreement does not give us the power to form an advertising council.
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% of gross sales and not more than 5% of 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 cooperative. We have the power to require cooperatives to be formed, changed, dissolved, or merged.
Advertising Fund. You and all other franchisees must contribute to our Marketing Fund. Your contribution is 2% of gross sales per month. We reserve the right to have other franchisees contribute a different amount or at a different rate. Outlets that we own are not obligated to contribute to the Marketing Fund. We administer the fund. The fund is not audited. We will make unaudited annual financial statements available to you upon request.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 18–23)
What This Means (2024 FDD)
According to the 2024 Bombs Away Franchise Disclosure Document, Bombs Away does not currently have an advertising council composed of franchisees. The FDD also states that the franchise agreement does not give Bombs Away the power to form an advertising council. This means franchisees do not have a formal mechanism for providing input on advertising strategies or how the marketing fund is spent at the corporate level.
However, Bombs Away does have the right to require franchisees to participate in local or regional advertising cooperatives. The amount a franchisee must contribute to the cooperative will be determined by a vote of the members, but it will not be less than 1% of gross sales and not more than 5% of gross sales. Each franchisee in the area has one vote per outlet, unless they are in default under their franchise agreement. Bombs Away's own outlets, if members of a cooperative, must contribute on the same basis as franchisees and vote on the same basis as other members.
Bombs Away administers these cooperatives but has the right to delegate this responsibility. They also have the right to require the cooperative to operate from written bylaws or other governing documents that they determine. Bombs Away also requires that franchisees contribute 2% of gross sales per month to a Marketing Fund, which Bombs Away administers. Outlets that Bombs Away owns are not obligated to contribute to the Marketing Fund. While the fund is not audited, Bombs Away will make unaudited annual financial statements available to franchisees upon request.