Is a Buona franchisee required to join and participate in local advertising cooperatives?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.4 Co-operative Advertising. Franchisee shall join and participate in any local advertising cooperative which has been or may be formed consisting of franchisees and/or Franchisor-owned or Affiliateowned Buona Businesses in Franchisee's area or region. Franchisee agrees to contribute to the cooperative in the amount and manner agreed upon by a majority of the members of the cooperative. Contributions made by you to the cooperative will be credited to your local advertising expenditure requirements in Section 11.2 above. Each Buona Business in the cooperative, whether franchised or company-owned or affiliate-owned, shall have one vote in the cooperative. Franchisor assumes no direct or indirect liability or obligation to Franchisee or to any local co-operative with respect to the maintenance, direction, or administration of the co-operative, including without limitation, any failure by any franchisees to make any contributions to the co-operative.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees are required to join and participate in local advertising cooperatives if one exists in their area. Specifically, a Buona franchisee must participate in any local advertising cooperative that has been or may be formed, consisting of both franchisees and/or Buona businesses owned by the franchisor or its affiliates within the franchisee's region.
The franchisee is obligated to contribute to the cooperative, with the amount and manner of contribution determined by a majority vote of the cooperative's members. Any contributions made by the franchisee to the cooperative will be credited towards their local advertising expenditure requirements, which are set at a minimum of one percent of the franchised business's gross sales. Each Buona business within the cooperative, whether franchised, company-owned, or affiliate-owned, has one vote in the cooperative's decisions.
Buona assumes no direct or indirect liability or obligation to the franchisee or any local cooperative regarding the maintenance, direction, or administration of the cooperative. This includes any failure by franchisees to make contributions to the cooperative. This arrangement is fairly common in franchising, allowing franchisees to pool resources for more effective local advertising while the franchisor maintains some distance from the co-op's operations.