Who can review the annual financial statements of a Bombs Away advertising cooperative?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
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, the annual financial statements of any local or regional advertising cooperatives will be available for review by Bombs Away and the members of the cooperative. Bombs Away has the power to require cooperatives to be formed, changed, dissolved, or merged.
Bombs Away may delegate the responsibility of administering the cooperative to an outside company, such as an advertising agency or accounting firm, or to the franchisee members of the cooperative. The amount franchisees 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. If Bombs Away's own outlets are members of a cooperative, they must contribute to the cooperative on the same basis as franchisees and will vote on the same basis as other members.
It is important to note that the governing documents for these cooperatives are not currently available for review. Bombs Away also requires franchisees to contribute 2% of gross sales per month to a Marketing Fund, which Bombs Away administers. Unlike the advertising cooperatives, the Marketing Fund is not audited, though Bombs Away will make unaudited annual financial statements available to franchisees upon request.