Can Bombs Away delegate responsibility for administering the advertising cooperative?
Bombs_Away 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% 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
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 18–23)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, Bombs Away has the right to require franchisees to participate in a local or regional advertising cooperative. Bombs Away will define the cooperative's area based on media markets or other geographic criteria. Each franchisee gets one vote per outlet unless they are in default of their franchise agreement. The contribution amount is determined by the members' vote, ranging from 1% to 5% of gross sales. If Bombs Away's own outlets are members, they contribute and vote on the same basis as franchisees.
Bombs Away administers the cooperative but can delegate this responsibility. The FDD states that Bombs Away has 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.
Bombs Away also has the right to require the cooperative to operate from written bylaws or other governing documents that they determine. These documents are not currently available for review. The cooperatives will prepare annual financial statements available for review by Bombs Away and the cooperative members. Bombs Away has the power to require cooperatives to be formed, changed, dissolved, or merged.