How are decisions made within a Cordova advertising cooperative?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 6: Advertising Cooperatives – If two or more Cordova Businesses are operating within a geographic area, region, or market designated by us (a "designated market"), we reserve the right to establish and require your participation in a local or regional advertising cooperative within the designated market. If established, you will be required to participate in the cooperative and make on-going payments to the cooperative in such amounts and subject to such caps as established by the cooperative members. We anticipate that each Cordova Business franchisee will have one vote for each Cordova Business located within the cooperative market and those cooperative decisions shall be made based on approval of a simple majority vote with a quorum of not less than 25% of the designated cooperative members. Contributions to a local or regional cooperative that we designate will count toward satisfaction of your minimum local marketing requirements but shall not exceed your local marketing requirement.
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, if Cordova establishes a local or regional advertising cooperative, each franchisee within the designated market typically has one vote for each Cordova business they operate within that cooperative market. Decisions are made based on a simple majority vote, provided that a quorum of at least 25% of the designated cooperative members is present.
This means that franchisees within a cooperative have a direct say in how advertising funds are spent in their region. The voting structure ensures that decisions are made democratically among the members, giving each franchisee a voice in the cooperative's activities. The quorum requirement ensures that a sufficient number of members participate in the decision-making process, preventing decisions from being made by a small minority.
Franchisees should be aware that Cordova reserves the right to establish these advertising cooperatives in any geographic area, region, or market where two or more Cordova businesses operate. Participation in these cooperatives is mandatory if established. Franchisees are required to make ongoing payments to the cooperative, with the amounts and caps determined by the cooperative members themselves. These contributions can count towards the franchisee's minimum local marketing requirements, but cannot exceed that requirement, which is $1,000 per territory per month.
This structure is fairly common in franchising, as advertising cooperatives allow franchisees to pool resources and make collaborative decisions about marketing strategies in their local areas. However, franchisees should carefully consider the potential costs and benefits of participating in a cooperative, as well as the level of influence they will have in decision-making.