Under what circumstances can Chicken Guy establish a Regional Co-op?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
E. Regional Co-op.
- (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, Chicken Guy has the sole discretion to establish a Regional Co-op in lieu of a Regional Advertising Fund for the area that includes the Franchised Location. Franchisees are required to contribute to the Regional Co-op in an amount specified in the attached Data Sheet, which may be modified by Chicken Guy.
Chicken Guy may create bylaws for the Regional Co-op and may require the Regional Co-op to incorporate. The funds within the Regional Co-op are to be used for purposes determined by a majority vote, with each Chicken Guy restaurant in the co-op having one vote. Unless Chicken Guy provides written consent, the Regional Co-op's advertising must align with Chicken Guy's specifications, and all advertising materials must be submitted to Chicken Guy for approval before use, adhering to the standards outlined in Section 9.F. Franchisees who are members of the Regional Co-op are entitled to vote, unless they are in default under their franchise agreement or any other agreement with Chicken Guy or its affiliates.
Chicken Guy maintains membership in the Regional Co-op, with the right to attend and participate in meetings, but only has a vote if it or its affiliates operate Chicken Guy restaurants in the area covered by the co-op. Chicken Guy must receive at least 3 days' written notice of Regional Co-op meetings. If the members of the Regional Co-op cannot agree on how to spend the funds, Chicken Guy can take over the decision-making authority after providing 10 days' advance written notice to the members. Chicken Guy also has the right to terminate or restart the Regional Co-op, or convert it to a Regional Advertising Fund, and upon termination, all funds must be used for advertising and promotional purposes.