How many votes does each Bombs Away franchisee have in a local or regional 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 the 2024 Bombs Away Franchise Disclosure Document, each franchisee within a local or regional advertising cooperative is entitled to one vote per outlet, provided they are not in default under their franchise agreement. Bombs Away retains the right to mandate participation in these cooperatives, defining their geographic scope based on media markets or other criteria. The contribution amount from each franchisee will be determined by a vote of the members, with a range of 1% to 5% of gross sales. Bombs Away also states that if their own outlets are members, they will contribute and vote on the same basis as franchisees.
Bombs Away retains significant control over these cooperatives, including the right to administer them directly or delegate administration to an outside company or the franchisee members. They can also require the cooperative to operate under written bylaws or other governing documents. Furthermore, Bombs Away has the power to form, change, dissolve, or merge these cooperatives.
Prospective franchisees should note that the specific governing documents for these cooperatives are not currently available for review. This lack of transparency could pose a risk, as the rules and procedures of the cooperative could significantly impact a franchisee's advertising strategy and costs. It is advisable for potential franchisees to seek further clarification from Bombs Away regarding the operational details and potential financial implications of participating in a local or regional advertising cooperative.