Who sets the cooperative advertising fee for a Chop5 Salad Kitchen franchise?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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 the applicable cooperative; or (b) require you to pay these fees directly to the cooperative. All cooperative advertising fees you pay are credited towards your Local Advertising Commitment. We reserve the right to form, change, merge or dissolve advertising cooperatives in our discretion.
- 10.5. Cap on Required Advertising Expenditures. Notwithstanding anything in §10 to the contrary, the maximum total amount we may charge you at any given time for brand fund fees, the Local Advertising Commitment and Cooperative Advertising Fees, on a combined basis, shall be capped at 8.5% of Gross Sales.
Source: Item 23 — RECEIPT (FDD pages 50–178)
What This Means (2024 FDD)
According to the 2024 Chop5 Salad Kitchen Franchise Disclosure Document, the cooperative advertising fee can be set either by Chop5 Salad Kitchen or by the cooperative itself. Chop5 Salad Kitchen may set the minimum cooperative advertising fee, or it may allow the cooperative to set the fee based on a majority vote of its members.
Regardless of who sets the fee, it will not exceed the franchisee's Local Advertising Commitment. The cooperative advertising fee is due on each royalty payment due date or another date established by the cooperative. Franchisees may pay these fees directly to the cooperative or Chop5 Salad Kitchen may collect the fees and remit them to the cooperative.
All cooperative advertising fees paid by the franchisee are credited towards 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 Chop5 Salad Kitchen may charge a franchisee for brand fund fees, the Local Advertising Commitment, and Cooperative Advertising Fees, on a combined basis, is capped at 8.5% of Gross Sales.