How much must a Chicken Guy franchisee contribute to the Regional Co-op?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) In lieu of a Regional Advertising Fund for the area that includes the Franchised Location, Chicken Guy, in its sole discretion, may establish a Regional Co-op. Franchisee shall contribute to the Regional Co-op in the amount set forth in the attached Data Sheet, as subsequently modified by Chicken Guy. Chicken Guy, if it so elects, may prepare bylaws to be used by the Regional Co-op and may require the Regional Co-op to incorporate.
- (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 Chicken Guy's 2025 Franchise Disclosure Document, if a Regional Co-op is established for the area that includes the Franchised Location, the franchisee must contribute to that Regional Co-op. The specific amount that the franchisee must contribute will be detailed in the attached Data Sheet, and may be modified by Chicken Guy at a later date.
The funds within the Regional Co-op are to be spent as determined by a majority vote of the members, with each Chicken Guy restaurant in the co-op getting one vote. All advertising conducted by the Regional Co-op must conform to Chicken Guy's specifications and be submitted for approval before use. Franchisees in default under their agreements are not entitled to vote on co-op matters. Chicken Guy is always a member and can participate in meetings, but only has a vote if it operates Chicken Guy restaurants in the area.
Chicken Guy retains the right to terminate or convert the Regional Co-op into a Regional Advertising Fund. They may also grant exemptions from membership to franchisees. Chicken Guy has the sole right to enforce contribution obligations, and franchisees do not have the right to enforce other franchisees' obligations. This structure gives Chicken Guy significant control over regional advertising efforts, while also allowing for local input through the co-op voting process.