What is the maximum amount for the Cooperative Advertising Fee for Chop5 Salad Kitchen franchisees?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
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| TYPE OF FEE 1 | AMOUNT 2, 3 | DUE DATE | REMARKS |
|---|---|---|---|
| Brand Fund Fee | [1st Year] 0.5% of Gross Sales [2nd Year] 1.0% of Gross Sales [Rest of Term] 1.5% of Gross Sales | Same as royalty fee | You must contribute this amount to the Brand Fund we administer. You have no voting rights pertaining to the administration of the Brand Fund, the creation or placement of advertising, or the amount of the brand fund fee. We may increase the brand fund fee by up to 4% on 180 days' prior notice. 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%. |
| Local Advertising | [1st Year] 8.0% of Gross Sales | Monthly, as incurred | This is the minimum amount you must spend on advertising and marketing in your local market to promote your Restaurant. This expenditure is in addition to your brand fund fee. We may increase the required expenditures by up to 2% |
| Commitment | [Rest of Term] 3.0% of Gross Sales | on 180 days' prior notice. 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%. | |
| Cooperative Advertising Fee | Amount set by cooperative (not to exceed Local Advertising Commitment) | Same as royalty fee | See Note 4. |
| Training Fee | Up to $500 per person per day (plus Travel Expenses for onsite training) | 10 days after invoice | Payable for each person who attends: (a) initial training after you open (new Operating Partner or manager); (b) repeat training (after failing a prior attempt); (c) refresher or supplemental training; (d) remedial training; or (e) additional training you request. You must also reimburse us for Travel Expenses we incur for training onsite at your Restaurant. |
| Conference Registration Fee | Up to $1,000 per person per conference (currently $300 per person per conference) | 10 days after invoice | We may hold conferences to discuss matters affecting franchisees. Attendance is mandatory unless: (a) we designate attendance as optional; or (b) we waive your obligation to attend based on showing of good cause. If you fail to attend a required conference without a waiver from us, you must pay us the conference registration fee despite your non-attendance (we will provide you with a copy of any written materials distributed at the conference). |
| Technology Fee | Up to $1,000 per month (not currently charged) | 10 days after invoice or as otherwise specified | This fee includes all amounts you pay us and our affiliates relating to the Technology Systems, including amounts paid for proprietary items and amounts we collect from you and remit to third-party suppliers. It may also include a reasonable administrative fee for managing the technology platform and negotiating / managing relationships with third-party licensors. It does not include any amounts you pay directly to third-party suppliers. |
Source: Item 6 — OTHER FEES (FDD pages 12–17)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, the Cooperative Advertising Fee is determined by the cooperative itself, but it cannot exceed the 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. As of December 31, 2022, there were no advertising cooperatives in effect.
The cooperative advertising fees are used for advertising within specific regions and are uniformly imposed on all restaurants within the cooperative, including company-owned restaurants. The franchisor may either collect these fees and remit them to the cooperative or require franchisees to pay the fees directly to the cooperative. Each member of the cooperative gets one vote for each restaurant they own within the cooperative, giving both franchisees and Chop5 Salad Kitchen (for company-owned restaurants) a say in how the cooperative is run.
Franchisees should note that all cooperative advertising fees they pay are credited towards their Local Advertising Commitment. This means that participation in the cooperative can help fulfill their local advertising obligations. Prospective franchisees should inquire about the existence and structure of any regional advertising cooperatives in their area to understand the potential costs and benefits of participating.