What decisions are the members of a Cordova advertising cooperative responsible for?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
- Advertising Cooperative – We possess the right to authorize, establish, designate and de-authorize a local or regional advertising cooperative within markets that we designate. We will exclusively determine the geographic and other boundaries constituting each cooperative and factors that we will consider include media markets and distribution channels including print, broadcast, and digital. If we establish a cooperative within a market that includes your Cordova Business, you must contribute to the cooperative in such amounts and frequency as determined by the cooperative. Members of the cooperative will be responsible for administering the cooperative, including determining the amount of contributions, marketing expenditures and allocations. We may require that cooperative decisions be made based on approval of a simple majority of franchisee members based on one vote per Cordova Business and with a quorum constituting not less than 25% of the designated franchisee cooperative members. If a cooperative exceeds nine franchisee members, we may require that the cooperative establish formal governing documents. Each cooperative must prepare annual unaudited financial statements that must be provided to each cooperative member for review. We reserve the right to form, change, dissolve, or merge any advertising
cooperative. If we elect to form a local or regional cooperative or if a cooperative already exists as to the area of your Cordova Business, you will be required to participate in the cooperative in accordance with the provisions of our operations manual which we may supplement and modify from time to time. (Franchise Agreement, Article 9.C.). You will not be required to make contributions to a local or regional advertising cooperative in amounts exceeding the local marketing requirements.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 23–28)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, if Cordova establishes an advertising cooperative in a market that includes a franchisee's business, the franchisee must contribute to the cooperative. The members of the cooperative, which include franchisees, are responsible for administering the cooperative. This includes determining the amount of contributions required from each member, deciding how marketing funds will be spent, and allocating those expenditures.
Cordova retains significant control over the advertising cooperative. Cordova has the right to authorize, establish, designate, and de-authorize these cooperatives. Cordova exclusively determines the geographic and other boundaries of each cooperative, considering factors like media markets and distribution channels. Cordova may also require that cooperative decisions be based on a simple majority vote of franchisee members, with a quorum of at least 25% of the designated franchisee cooperative members. If a cooperative exceeds nine franchisee members, Cordova may require the establishment of formal governing documents.
Each advertising cooperative must prepare annual unaudited financial statements and provide them to each member for review. Cordova also reserves the right to form, change, dissolve, or merge any advertising cooperative. Franchisees are required to participate in the cooperative according to the provisions in Cordova's operations manual, which Cordova may modify from time to time. However, franchisees will not be required to contribute more than the local marketing requirements.
Prospective franchisees should be aware that participation in an advertising cooperative is mandatory if one exists in their market. While franchisees have a say in the cooperative's administration, Cordova retains considerable control over its structure and operation. Franchisees should inquire about the existence of any current or planned advertising cooperatives in their target market and carefully review the operations manual for specific requirements and guidelines.