Who sets the minimum Cooperative Advertising Fee for Chop5 Salad Kitchen?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
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, the franchisor may set the minimum cooperative advertising fee. However, this fee may be increased by a majority vote of all members of the cooperative, but it cannot exceed the maximum amount specified. Each member of the cooperative gets one vote for each Chop5 Salad Kitchen restaurant they own within the cooperative.
Chop5 Salad Kitchen and its affiliates are also members of the cooperative and have the same voting rights as franchisees for company-owned restaurants. However, if company-owned restaurants make up the majority of the cooperative, Chop5 Salad Kitchen will not increase the cooperative advertising fee unless a majority of all franchisee members vote in favor of the increase. All cooperative advertising fees paid by franchisees are credited towards their Local Advertising Commitment.
The maximum total amount that Chop5 Salad Kitchen 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. As of December 31, 2022, there were no advertising cooperatives in effect.