If Chocolate Bash outlets are members of a local advertising cooperative, how do they contribute?
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 the 2024 Chocolate Bash Franchise Disclosure Document, while Chocolate Bash does not currently have any local or regional advertising cooperatives, they retain the right to require franchisees to participate in one in the future. The area of the cooperative will be determined based on media markets or other geographic criteria deemed appropriate by Chocolate Bash. Each Chocolate Bash franchisee within the cooperative area would have one vote per outlet, unless they are in default of their franchise agreement.
The amount a franchisee must contribute to the advertising cooperative will be determined by a vote of the members, but the contribution cannot be less than 1% of gross sales. If Chocolate Bash's own outlets are members of the cooperative, they must contribute on the same basis as franchisees and will vote on the same basis as other members. However, if Chocolate Bash 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 they have the right to delegate this responsibility to an outside company, such as an advertising agency or accounting firm, or to the franchisee members themselves. Chocolate Bash also has the right to require the cooperative to operate from written bylaws or other governing documents that they determine. It is important to note that these documents are not currently available for review. The cooperatives will prepare annual financial statements, which will be available for review only by Chocolate Bash and the members of the cooperative. Chocolate Bash retains the power to require cooperatives to be formed, changed, dissolved, or merged.