Who sets the minimum cooperative advertising fee for Chop5 Salad Kitchen restaurants, and what is the limit?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
We may, but need not, form advertising cooperatives for the benefit of all Restaurants located in a particular region. We will determine the boundaries of the cooperative. In most instances, the boundaries will coincide with zip codes, designated marketing areas or municipal boundaries. We will specify the manner in which the cooperative is organized and governed. We may choose between: (a) administering the cooperative ourselves; or (b) establishing an advertising council, comprised by the cooperative's members, to administer the cooperative. We may require that the cooperative be administered in accordance with written bylaws, organizational documents or other governing documents that we approve.
If your Restaurant is located within a region subject to an advertising cooperative you must: (a) participate in the cooperative according to its rules and procedures and abide by its decisions; and (b) pay a cooperative advertising fee. We may set the minimum cooperative advertising fee or we may allow the cooperative to set the fee based on majority vote of its members. In either case, the cooperative advertising fee will not exceed your Local Advertising Commitment. All cooperative advertising fees you pay are credited against your Local Advertising Commitment. Any company-owned Restaurant located in the cooperative will contribute on the same basis as franchisees.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 24–36)
What This Means (2024 FDD)
According to the 2024 Chop5 Salad Kitchen FDD, the minimum cooperative advertising fee can be set either by Chop5 Salad Kitchen or by a majority vote of the cooperative's members. The cooperative advertising fee will not exceed the franchisee's Local Advertising Commitment.
If a Chop5 Salad Kitchen restaurant is located in a region subject to an advertising cooperative, the franchisee must participate in the cooperative and adhere to its rules and decisions. They are also required to pay a cooperative advertising fee. Any company-owned Chop5 Salad Kitchen restaurant within the cooperative will contribute on the same basis as the franchisees.
All cooperative advertising fees paid by the franchisee are credited against their Local Advertising Commitment. This means that the money spent on cooperative advertising counts towards fulfilling the franchisee's obligation to spend on local advertising, providing a direct benefit for their participation.