How is the area of a Chocolate Bash advertising cooperative defined?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
Local or Regional Advertising Cooperatives. We do not currently have any local or regional advertising cooperatives. We have the right to require you to participate in a local or regional advertising cooperative. We will define the area of the cooperative based on media markets, or other geographic criteria that we deem appropriate. Each franchisee in the area would have one vote per outlet (unless the franchisee is in default under its franchise agreement). The amount you must contribute to the cooperative will be determined by vote of the members, but not less than 1% of gross sales. If our own outlets are members of a cooperative, they must contribute to the cooperative on the same basis as franchisees, and they will vote on the same basis as other members. If our outlets have controlling voting power, there is no maximum on fees that could be imposed. We administer the cooperative, but we have the right to delegate responsibility for administration to an outside company such as an advertising agency or accounting firm, or to the franchisee members of the cooperative. We have the right to require the cooperative to operate from written bylaws or other governing documents that we determine. The documents are not
currently available for you to review. Cooperatives will prepare annual financial statements which will be made available for review only by us and by the members of cooperative. We have the power to require cooperatives to be formed, changed, dissolved, or merged.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 19–25)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the area of any local or regional advertising cooperative will be defined by Chocolate Bash itself. The cooperative's area will be based on media markets or other geographic criteria that Chocolate Bash deems appropriate.
Chocolate Bash has the right to require franchisees to participate in these advertising cooperatives. Each franchisee within the defined area has one vote per outlet, unless they are in default of their franchise agreement. The amount each franchisee contributes will be determined by a vote of the members, but it will not be less than 1% of gross sales.
If Chocolate Bash owns outlets within the cooperative's area, those outlets must contribute on the same basis as franchisees and will have the same voting rights. However, if Chocolate Bash's outlets have controlling voting power, there is no limit to the fees that could be imposed on the cooperative members. Chocolate Bash also has the power to require cooperatives to be formed, changed, dissolved, or merged.
Chocolate Bash will administer the cooperative but can delegate this responsibility to an outside company or the franchisee members. Chocolate Bash also has the right to require the cooperative to operate from written bylaws or other governing documents that they determine. These documents are not currently available for review. Cooperatives will prepare annual financial statements, which will be available for review only by Chocolate Bash and the members of the cooperative.