Can Cilantro Taco Grill establish a regional advertising cooperative?

• 13.4 Advertising Cooperative.

Franchisor reserves the right to establish, in Franchisor's sole discretion, a regional advertising cooperative.

If a regional cooperative is established during the term of this Agreement, Franchisee agrees to sign all documents Franchisor requests to become a member of the cooperative according to the terms of the documents.

If Franchisor establishes a regional cooperative, Franchisee agrees to contribute amounts equal to Franchisee's share of the total cost of cooperative advertising, in addition to required Worldwide Creative Marketing Fees.

In no event may the Restaurant be required to be a member of more than one regional advertising cooperative.

The regional advertising cooperative must be governed in the manner Franchisor prescribes.

Franchisee shall contribute such amounts at the times and in the manner as determined by the regional advertising cooperative members.

Any funds contributed to a regional advertising cooperative will be credited against Franchisee's obligation to pay for Local Advertising as set forth in Section 13.2 above; provided, however, that if Franchisee's contributions to a regional advertising cooperative are less than the Local Advertising requirement, Franchisee shall nevertheless spend the difference locally.

The following provisions apply to each regional advertising cooperative:

• 13.4.1 the regional advertising cooperative must be organized and governed in a form and manner, and commence operation on a date, that Franchisor approves in advance in writing;

• 13.4.2 the regional advertising cooperative must be organized for the exclusive purpose of administering advertising programs and developing, subject to Franchisor's approval, standardized promotional materials for the members' use in Local Advertising within the regional advertising cooperative's area;

• 13.4.3 the regional advertising cooperative must have written governing documents of its rules and procedures, but such rules or procedures must be approved by Franchisor and must not restrict or expand Franchisee's rights or obligations under this Agreement;

• 13.4.4 except as otherwise provided in this Agreement, and subject to Franchisor's approval, any lawful action of the regional advertising cooperative (including, without limitation, imposing assessments for Local Advertising) at a meeting attended by members possessing more than fifty percent (50%) of the total voting power in the regional advertising cooperative is binding upon Franchisee if approved by members possessing more than fifty percent (50%) of the total voting power possessed by members in attendance, with each Restaurant having one (1) vote, but no franchisee (or commonly controlled group of franchisees) may have more than twenty-five percent (25%) of the vote in the regional advertising cooperative regardless of the number of Restaurants owned;

• 13.4.5 without Franchisor's prior written approval, the regional advertising cooperative may not use, nor furnish to its members, any advertising or promotional plans or materials; all such plans and materials must be submitted to Franchisor in accordance with the procedure set forth in Section 13.6;

• 13.4.6 the regional advertising cooperative may require its members to contribute to it quarterly and in such amounts as it determines; provided, however, that in no event may contributions to the regional advertising cooperative exceed one-half of one percent (0.5%) of Gross Revenue;

Source: Item 23 — RECEIPT (FDD pages 52–208)