Does the Bombs Away franchise agreement give Bombs Away the power to form an advertising council?
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
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, the franchise agreement does not give Bombs Away the power to form an advertising council. However, Bombs Away does not currently have an advertising council composed of franchisees.
Bombs Away has the right to require franchisees to participate in a local or regional advertising cooperative. The area of the cooperative will be defined based on media markets, or other geographic criteria that Bombs Away deems appropriate. Each franchisee in the area would have one vote per outlet, unless the franchisee is in default under its franchise agreement. The amount a franchisee 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 Bombs Away's 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. Bombs Away will administer the cooperative, but they 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. Bombs Away has the right to require the cooperative to operate from written bylaws or other governing documents that they determine. Cooperatives will prepare annual financial statements which will be made available for review only by Bombs Away and by the members of cooperative. Bombs Away has the power to require cooperatives to be formed, changed, dissolved, or merged.