What advertising restrictions apply to the Chicken Guy Regional Co-op?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) Monies in the Regional Co-op may be spent for the purposes determined by majority vote of the Regional Co-op on the basis of one vote for each Chicken Guy! Restaurant in the Regional Co-op. Unless otherwise consented to in writing by Chicken Guy, the Regional Co-op shall only conduct advertising that conforms with those advertising and sales promotions specified by Chicken Guy from time to time (including the media in which conducted). All advertising shall be submitted to Chicken Guy prior to first use as provided in Section 9.F., and all advertising shall adhere to the standards set forth in Section 9.F. Each franchisee who is a member of the Regional Co-op shall be entitled to vote on Regional Co-op matters; however, a franchisee shall not be entitled to vote if it is in default under its franchise agreement or any other agreement with Chicken Guy or its affiliates. Chicken Guy always shall be a member of the Regional Co-op and be entitled to attend and fully participate in Regional Co-op meetings, but Chicken Guy shall not have a vote unless it or its affiliates operates Chicken Guy! Restaurants in the area covered by the Regional Co-op. Chicken Guy shall be given at least 3 days' prior written notice of Regional Co-op meetings. If the members of the Regional Co-op are unable or fail to determine the manner in which Regional Co-op monies should be spent, Chicken Guy may assume this decision making authority following 10 days' advance written notice to the members of the Regional Co-op.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy FDD, if a Regional Co-op is established, advertising conducted by the Co-op must conform to the advertising and sales promotions specified by Chicken Guy. All advertising must be submitted to Chicken Guy before its first use and adhere to the standards set forth in Section 9.F of the franchise agreement. Each franchisee who is a member of the Regional Co-op is entitled to vote on Regional Co-op matters, unless they are in default under their franchise agreement. Chicken Guy is always a member of the Regional Co-op and is entitled to attend and participate in meetings, but does not have a vote unless it operates Chicken Guy restaurants in the area. Chicken Guy must be given at least 3 days' prior written notice of Regional Co-op meetings. If the members of the Regional Co-op cannot agree on how to spend the Regional Co-op monies, Chicken Guy may assume decision-making authority after 10 days' advance written notice to the members.
These restrictions mean that while franchisees have a say in the Regional Co-op's advertising through their vote, Chicken Guy ultimately maintains control over the advertising's content and standards. Franchisees must ensure their advertising aligns with Chicken Guy's specifications and obtain approval before use. This is a common practice in franchising, designed to maintain brand consistency and protect the brand's image.
Chicken Guy also has the right to terminate or convert the Regional Co-op to a Regional Advertising Fund. If terminated, all monies in the Regional Co-op must be spent for advertising and/or promotional purposes. Chicken Guy can also grant exemptions from the Regional Co-op membership requirement to any franchisee. Chicken Guy has the sole right to enforce the obligations of franchisees to contribute to the Regional Co-op.