Who determines the amounts that a Buns On Fire franchisee must contribute to a cooperative?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
We currently do not have any cooperatives. However, if we choose to, we may designate a geographic area in which two (2) or more Franchise Businesses are located as a region in order to establish a cooperative. The cooperative's members in any area will include all of the Franchise Businesses operating in that area (including us or our affiliates, if applicable). Each cooperative will be organized and governed in a form and manner, and begin operating on a date, that we determine. Each cooperative will operate in accordance with a written governing document which we may amend at any time upon written notice to the cooperative's members. Each cooperative's purpose is, with our approval, to administer advertising programs and develop advertising, marketing and promotional materials for the area that the cooperative covers. You must become a member of any cooperative whose area includes your Franchise Business and must contribute to the cooperative the amounts determined by the cooperative.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 25–33)
What This Means (2025 FDD)
According to Buns On Fire's 2025 Franchise Disclosure Document, if a cooperative is established in an area with multiple franchise businesses, the cooperative itself determines the contribution amounts required from each franchisee. However, Buns On Fire retains significant control over the cooperative's operations. Buns On Fire designates the geographic area for the cooperative, determines its organizational structure and governing documents, and must approve all advertising programs and materials.
This means that while the cooperative sets the contribution amounts, Buns On Fire ultimately influences those decisions through its control over the cooperative's structure and activities. The FDD states that each cooperative will operate in accordance with a written governing document which Buns On Fire may amend at any time upon written notice to the cooperative's members. This gives Buns On Fire the power to modify the rules and guidelines of the cooperative, which could indirectly affect the contribution amounts required from franchisees.
For a prospective Buns On Fire franchisee, this highlights the importance of understanding the potential costs associated with cooperative advertising. While the franchisee must participate in any cooperative established in their area, the actual financial commitment will depend on the cooperative's decisions, subject to Buns On Fire's oversight. It would be prudent for a potential franchisee to inquire about the likelihood of a cooperative being established in their desired location and to understand the factors that could influence contribution amounts.