How much is a Casiola franchisee required to contribute to the Advertising Cooperative?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
to the System, including in relation to the sale of Casiola Business franchises; and
- (5) Franchisee grants to Franchisor the right to use of Franchisee's financial data and information related to the financial performance of the Franchised Business for reporting purposes within Franchisor's publicly issued and published Franchise Disclosure Document, including in relation to the sale of franchises.
9.C. ADVERTISING COOPERATIVE
At all times Franchisor, in Franchisor's Reasonable Business Judgment, possesses the right to authorize, establish, designate and de-authorize a local or regional advertising cooperative within those markets that Franchisor designates (the "Advertising Cooperative"). Franchisee agrees that Franchisor possesses the sole and exclusive right to designate any geographic area in which two or more Casiola Business franchises are located as a region for the purpose of establishing an Advertising Cooperative. If Franchisee's Casiola Business or Operating Market is located within the geographic area of an Advertising Cooperative, franchisee must participate in and contribute to the Advertising Cooperative. Franchisee agrees to the following:
- (1) If Franchisor previously instituted or, in the future, institutes an Advertising Cooperative that includes, in whole or in part, Franchisee's Operating Market or Franchisee's Casiola Business Location, Franchisee shall participate in and make such on-going financial contributions to the Advertising Cooperative, as determined by the Advertising Cooperative;
- (2) Franchisor may establish foundational and organizational requirements of the Advertising Cooperative including voting provisions that allows the Advertising Cooperative to make decisions based on the simple majority vote (one vote per franchisee Casiola Business located within the designated area of the Advertising Cooperative) with a quorum constituting 25% of those franchisees within the Advertising Cooperative;
- (3) Unless otherwise authorized and approved by Franchisor in writing, each Advertising Cooperative shall be organized for the exclusive purpose of administering marketing programs and the development of media (all subject to the review and approval of Franchisor) for use by members of the Advertising Cooperative in local or regional marketing;
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, if a franchisee's Casiola Business location or Operating Market falls within the geographic area of an Advertising Cooperative, they must participate in and contribute to it. The amount of the contribution is determined and required by the Advertising Cooperative itself. However, the franchisee's contribution to the Advertising Cooperative will not exceed the franchisee's local minimum marketing obligations as outlined in Article 9.B of the Franchise Agreement, and these contributions count toward fulfilling those minimum local marketing obligations.
Casiola retains the right to authorize, establish, designate, and de-authorize local or regional advertising cooperatives in markets they designate. Casiola also possesses the sole right to designate any geographic area with two or more Casiola Business franchises as a region for establishing an Advertising Cooperative.
Franchisees are required to submit statements and reports to both the Advertising Cooperative and Casiola, as required by the cooperative and approved by Casiola. All contributions are maintained and administered according to the documents governing the Advertising Cooperative, which operates solely for collecting and spending fees for the purposes outlined in Article 9.C. It is important to note that no marketing materials, plans, or media can be used by the Advertising Cooperative or its members without prior written approval from Casiola.
Notably, Casiola-owned businesses or those owned by its affiliates within the Advertising Cooperative's geographic area are not required to contribute to the cooperative. The Advertising Cooperative must also comply with rules and regulations established by Casiola in the Operations Manual, which Casiola may modify from time to time. This ensures that Casiola retains control over marketing and advertising efforts within the franchise system.