What criteria does Chocolate Bash use to define the area of a local or regional advertising cooperative?
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
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 brand does not currently have any local or regional advertising cooperatives, but reserves the right to establish them in the future. Should Chocolate Bash choose to form these cooperatives, the FDD states that the area of the cooperative will be defined based on media markets or other geographic criteria deemed appropriate by Chocolate Bash.
Each Chocolate Bash franchisee within the defined area would have one vote per outlet, unless the franchisee is in default of their franchise agreement. The amount each franchisee must contribute to the cooperative will be determined by a vote of the members, but cannot be less than 1% of gross sales. If Chocolate Bash owns outlets that are members of the cooperative, those outlets must contribute on the same basis as franchisees and will vote on the same basis as other members.
However, if Chocolate Bash's own outlets have controlling voting power within the cooperative, there is no maximum limit on the fees that could be imposed on franchisees. Chocolate Bash will administer the cooperative but has the right to delegate this responsibility to an outside company or to 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.