If Chocolate Bash establishes local or regional advertising cooperatives, what contribution is the franchisee required to make?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty | 6% of your gross sales | Monthly by the 5th day of the following month | See Note 1 and Note 2. |
| Marketing Fund Contribution | 1% of your gross sales | Monthly by the 5th day of the following month | |
| Market Cooperative Contribution | As determined by co-op. Currently, none. |
Source: Item 6 — OTHER FEES (FDD pages 9–13)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, franchisees may be required to contribute to market cooperative advertising. The amount of this contribution is determined by the cooperative itself. Currently, there are no market cooperative contributions required. However, Chocolate Bash retains the right to establish local or regional advertising cooperatives in the future. There is no stated maximum limit on the contribution amount that the co-op can determine.
This means that if Chocolate Bash establishes such a cooperative in the future, franchisees will be obligated to pay the amount determined by that co-op. Since there is no maximum limit specified in the FDD, the contribution amount could potentially be significant. The payments are due monthly by the 5th day of the following month.
Prospective franchisees should consider this potential uncapped expense when evaluating the financial feasibility of a Chocolate Bash franchise. It would be prudent to inquire with Chocolate Bash about their plans for establishing advertising cooperatives and to discuss the potential financial impact on franchisees. Understanding how these cooperatives are managed and how contribution amounts are determined is crucial for making an informed investment decision.