As of December 31, 2022, were there any advertising cooperatives in effect for Chop5 Salad Kitchen?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
We may establish regional advertising cooperatives for purposes of pooling advertising funds to be used in discrete regions. We may either: (a) collect cooperative advertising fees and remit them to the applicable cooperative; or (b) require you to pay these fees directly to the cooperative. Cooperative advertising fees are uniformly imposed on all Restaurants in the cooperative, including company-owned Restaurants. We may set the minimum cooperative advertising fee, which may be increased by majority vote of all members of the cooperative (but will not exceed the maximum amount specified in the table above). Each member is entitled to 1 vote for each Restaurant that is owned by the member and located in the cooperative. We and our affiliates will be members of the cooperative (and have the same voting rights as franchisees) with respect to company-owned Restaurants located in the cooperative. However, if the majority of Restaurants in the cooperative are company-owned Restaurants, we will not increase the cooperative advertising fee unless a majority of all franchisee members vote in favor of the increase. All cooperative advertising fees you pay are credited towards your Local Advertising Commitment. The maximum total amount we may charge at any given time for the brand fund fee, Local Advertising Commitment and Cooperative Advertising Fee is capped at 8.5% of Gross Sales. There were no advertising cooperatives in effect as of December 31, 2022.
Source: Item 6 — OTHER FEES (FDD pages 12–17)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, as of December 31, 2022, there were no advertising cooperatives in effect. However, Chop5 Salad Kitchen may establish regional advertising cooperatives in the future for the purpose of pooling advertising funds in specific regions.
If advertising cooperatives are established, Chop5 Salad Kitchen may either collect cooperative advertising fees and remit them to the cooperative or require franchisees to pay these fees directly to the cooperative. These fees are uniformly imposed on all restaurants within the cooperative, including company-owned restaurants. The franchisor may set the minimum cooperative advertising fee, which can be increased by a majority vote of the cooperative members, but it will not exceed the maximum amount specified. Each member gets one vote for each restaurant they own within the cooperative, and Chop5 Salad Kitchen and its affiliates also have membership and voting rights for their company-owned restaurants.
It's important to note that all cooperative advertising fees paid by franchisees are credited towards their Local Advertising Commitment. The maximum total amount that Chop5 Salad Kitchen may charge for the brand fund fee, Local Advertising Commitment, and Cooperative Advertising Fee is capped at 8.5% of Gross Sales. This cap ensures that franchisees' advertising and brand fund contributions remain within a reasonable limit of their overall revenue.