Can a Capriottis Sandwich Shop franchisee be exempt from the requirement of membership in a Cooperative?
Capriottis_Sandwich_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
- (vii) Franchisor, in Franchisor's sole discretion, may, upon written request of a franchisee stating reasons supporting the request, grant to any franchisee an exemption from the requirement of membership in a Cooperative. This exemption may be for any length of time and may apply to one (1) or more Franchised Restaurants owned by the franchisee. If an exemption is granted, a franchisee may be required to expend on local advertising the full amount that would otherwise be payable to the Cooperative. Franchisor, in Franchisor's sole discretion, may also exempt one (1) or more Franchised Restaurants owned or controlled by Franchisor from the requirement of membership in a Cooperative for those periods as Franchisor deems appropriate; and
- (viii) The Cooperative is not a trust fund. Franchisor shall have no fiduciary duty to Franchisee in connection with the collection or use of the Cooperative monies or any aspect of the operation of the Cooperative.
Source: Item 22 — CONTRACTS (FDD page 73)
What This Means (2025 FDD)
According to the 2025 Capriottis Sandwich Shop Franchise Disclosure Document, a franchisee can request an exemption from the requirement of membership in a Cooperative. The franchisor has the sole discretion to grant this exemption, which must be requested in writing with supporting reasons. The exemption can be for any length of time and may apply to one or more franchised restaurants owned by the franchisee.
If Capriottis Sandwich Shop grants an exemption, the franchisee may be required to spend the amount that would have been paid to the Cooperative on local advertising instead. This ensures that marketing efforts are maintained even without direct participation in the Cooperative.
Capriottis Sandwich Shop also reserves the right to exempt its own company-owned restaurants from the Cooperative membership requirement for periods it deems appropriate. The FDD clarifies that the Cooperative is not a trust fund, and Capriottis Sandwich Shop does not have a fiduciary duty to the franchisee regarding the collection or use of Cooperative funds or the operation of the Cooperative.