Who determines the amounts Cd One Price Cleaners franchisees must contribute to the Cooperative?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to the Marketing Fund contribution described above, you must contribute to the Cooperative the amounts that the Cooperative determines. These amounts are subject to our approval. All contributors typically will contribute on the same formula or at the same rate. All material decisions of the Cooperative, including contribution levels (which also require an approval), will require the affirmative vote of at least 51% of all the CD Stores operating within the Cooperative's area (including, if applicable, those that we and our affiliates operate), with each store receiving 1 vote.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 33–47)
What This Means (2025 FDD)
According to Cd One Price Cleaners' 2025 Franchise Disclosure Document, the Cooperative determines the contribution amounts required from franchisees. However, these amounts are subject to approval by Cd One Price Cleaners. All contributors typically contribute using the same formula or rate. Any decisions regarding contribution levels also require approval from Cd One Price Cleaners. All material decisions of the Cooperative, including contribution levels, need an affirmative vote of at least 51% of all Cd One Price Cleaners stores operating within the Cooperative's area, including those operated by Cd One Price Cleaners and its affiliates, with each store having one vote.
This means that while the Cooperative members initially decide on the contribution amounts, Cd One Price Cleaners retains ultimate control through its approval rights. The requirement for a 51% vote ensures that a majority of stores within the Cooperative's area agree on the contribution levels, providing a degree of collective decision-making. However, Cd One Price Cleaners' approval power means they can effectively veto any contribution level the Cooperative proposes.
For a prospective franchisee, this indicates that Cooperative contributions are not solely determined by fellow franchisees but are also influenced by Cd One Price Cleaners. The franchisee's contribution will be based on a standard formula or rate applied to all members. The franchisee has a vote in the Cooperative, but Cd One Price Cleaners' approval is essential for any contribution level to be implemented. This structure ensures that Cd One Price Cleaners maintains oversight and control over the financial aspects of the Cooperative's advertising and marketing efforts.
It is also important to note that the Cooperative's purpose is to administer advertising programs and develop advertising, marketing, and promotional materials for the area it covers, with Cd One Price Cleaners' approval. The Cooperative operates solely to collect and spend contributions for these purposes, and its members cannot use any advertising, marketing, or promotional programs or materials without Cd One Price Cleaners' prior written consent. This further emphasizes Cd One Price Cleaners' control over the Cooperative's activities and ensures that all advertising and marketing efforts align with the brand's overall strategy.