Under what condition can a Regional Advertising Cooperative be established for a Churchs Chicken restaurant's Designated Market Area (DMA)?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Section if, in Cajun's sole judgment, there has been demonstrated unique, objective circumstances justifying any such deferral, waiver, or return. On termination, all monies in the Advertising Fund shall be spent for advertising and/or promotional purposes. Cajun has the right to reinstate the Advertising Fund upon the same terms and conditions set forth in this Agreement upon 30 days' prior notice to Franchisee.
- (7) Under no circumstances shall Franchisee have any right to the return of any payment to the Advertising Fund, unless such payment was the result of manifest error.
B. Regional Advertising Cooperatives
(1) Cajun, in its sole discretion, may establish a Regional Advertising Cooperative ("Cooperative") in the regional area in which the Franchised Restaurant is located ("Designated Market Area" or "DMA"). Franchisee, in addition to contributing to the Advertising Fund, must contribute to the Cooperative the percentage of Gross Sales determined by that Cooperative along with any statements or reports that Cajun or the Cooperative may require. A Cooperative may also be established for the DMA in which the Franchised Restaurant is located upon the favorable vote of 80% of the owners of all Church's Restaurants (including Church's Restaurants operated by Cajun and its affiliates) on the basis of one vote for each restaurant owned and operated by that owner within that DMA. If a Cooperative has been established for the DMA in which the Franchised Restaurant will be located, Franchisee shall become a member of that Cooperative by the date the Franchised Restaurant commences operations, or, if a Cooperative for that DMA is established after the Franchised Restaurant opens, Franchisee shall become a member of that Cooperative within 30 days after the date on which the Cooperative commences operations. Franchisee shall not be required to be a member of more than one Cooperative with respect to the Franchised Restaurant.
- (2) Each Cooperative shall be organized for the exclusive purpose of administering regional advertising programs and developing, subject to Cajun's approval, standardized promotional materials for use by its members in local advertising. Cajun may require the Cooperative to adopt bylaws or regulations prepared by Cajun.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, a Regional Advertising Cooperative can be established in a Designated Market Area (DMA) under two conditions. First, Cajun, the franchisor, can establish a Cooperative at its sole discretion. Second, a Cooperative may be established if 80% of Churchs Chicken restaurant owners (including Cajun and its affiliates) in the DMA vote in favor, with each restaurant representing one vote.
If a Cooperative is established, franchisees must join. If the Cooperative is already in place when the Churchs Chicken restaurant opens, the franchisee must join upon commencement of operations. If the Cooperative is formed after the restaurant opens, the franchisee has 30 days to join after the Cooperative begins operating. Franchisees are only required to be a member of one Cooperative for their restaurant.
These Cooperatives are designed to administer regional advertising programs and develop standardized promotional materials, subject to Cajun's approval, for local advertising use by its members. Cajun retains significant control over these cooperatives, including the ability to require specific bylaws, mandate incorporation, and approve all advertising content. This ensures brand consistency and adherence to company standards across all regional advertising efforts.