If Chop5 Salad Kitchen establishes an advertising cooperative, who determines its boundaries?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
le discretion, you may not: (i) develop, host, create or otherwise maintain a website or other online or digital presence in connection with your Restaurant, including any website bearing our Marks; (ii) conduct digital or online advertising or marketing; or (iii) engage in ecommerce.
- 10.4. Advertising Cooperative. We may, but need not, establish regional advertising cooperatives for purposes of creating and/or purchasing advertising programs for the benefit of all Restaurants located in a particular region. We may: (a) determine the boundaries of the cooperative; (b) specify the manner in which the cooperative is organized and governed; (c) require the cooperative to be administered in accordance with written bylaws, organizational documents or other governing documents that we approve; and (d) require you to participate in the cooperative according to its rules and procedures and abide by its decisions. You must pay the cooperative advertising fee, which will be due on each royalty payment due date or on such other date established by the cooperative. We may set the minimum cooperative advertising fee or we may allow the cooperative to set the cooperative advertising fee based on majority vote of its members. In either case, the cooperative advertising fee will not exceed the amount of your Local Advertising Commitment. We may either: (a) collect cooperative advertising fees and remit them to
Source: Item 23 — RECEIPT (FDD pages 50–178)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, the company has the option to establish regional advertising cooperatives. If Chop5 Salad Kitchen chooses to do so, it has the authority to determine the boundaries of these cooperatives. This means that Chop5 Salad Kitchen decides which restaurants are included in a particular regional advertising group.
Chop5 Salad Kitchen also has the power to specify how the cooperative is organized and governed, and can require that the cooperative be administered according to written bylaws or other governing documents approved by them. Furthermore, franchisees may be required to participate in the cooperative, adhering to its rules, procedures, and decisions. Franchisees will be obligated to pay a cooperative advertising fee, due either on the royalty payment date or another date set by the cooperative.
The cooperative advertising fee will not exceed the franchisee's Local Advertising Commitment. Chop5 Salad Kitchen may either collect these fees and remit them to the cooperative or require franchisees to pay the fees directly. All cooperative advertising fees paid by the franchisee are credited toward their Local Advertising Commitment. Chop5 Salad Kitchen retains the right to form, change, merge, or dissolve advertising cooperatives at its discretion.
The maximum total amount that Chop5 Salad Kitchen may charge a franchisee for brand fund fees, the Local Advertising Commitment, and Cooperative Advertising Fees is capped at 8.5% of Gross Sales.