Does the Cilantro Taco Grill system currently have a regional advertising fund or cooperative?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
Currently, our System has no regional advertising fund or cooperative. However, we may decide to establish a regional fund or cooperative in the future and your participation may be mandatory, in our sole discretion. A regional cooperative will be comprised of all franchised Cilantro Taco Grill outlets in a designated geographic area. Our affiliate-owned outlets may participate in a regional cooperative, in our sole discretion. Each Cilantro Taco Grilloutlet will have one vote in the cooperative. We will determine in advance how each cooperative will be organized and governed. We have the right to form, dissolve, merge or change the structure of the cooperatives. If a cooperative is established during the term of your Franchise Agreement, you must sign all documents we request and become a member of the cooperative according to the terms of the documents. Currently, there are no governing documents available for your review.
If we establish a regional advertising fund or cooperative, each member will contribute up to 0.5% of Gross Revenue, as determined by the members. Your contributions to a regional advertising fund or cooperative will be in addition to your required contributions to the Worldwide Creative Marketing Fund; however, contributions made by you to a regional advertising fund or cooperative will be credited against your required expenditures for local advertising and we may require you to contribute up to one-half of your local advertising requirement to a regional advertising fund or cooperative. The cooperative is not required to prepare an annual financial statement.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 26–33)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, the franchise system does not currently have a regional advertising fund or cooperative. However, Cilantro Taco Grill retains the right to establish one in the future, and if they do so, franchisee participation may be mandatory.
If a regional cooperative is established, it will be comprised of all franchised Cilantro Taco Grill outlets within a designated geographic area, and affiliate-owned outlets may participate at Cilantro Taco Grill's discretion. Each outlet will have one vote in the cooperative, and Cilantro Taco Grill will determine the organization and governance of each cooperative. Franchisees would be required to sign all requested documents and become members of the cooperative according to its terms.
If Cilantro Taco Grill establishes a regional advertising fund or cooperative, franchisees may be required to contribute up to 0.5% of Gross Revenue, as determined by the members. These contributions would be in addition to the 2% of weekly Gross Revenue that franchisees must contribute to the Worldwide Creative Marketing Fund. However, contributions to a regional fund or cooperative can be credited against the franchisee's local advertising expenditures, and Cilantro Taco Grill may require franchisees to contribute up to one-half of their local advertising requirement to the regional fund or cooperative. The regional cooperative is not required to prepare an annual financial statement.