factual

What obligations are included in 'Advertising Contributions' for a Cordova franchisee?

Cordova Franchise · 2025 FDD

Answer from 2025 FDD Document

  • "Advertising Contributions" means any and all obligations of Franchisee to contribute to and/or pay fees to Franchisor or Franchisor's affiliate or designees as set forth in this Agreement including, but not limited to, the Brand Development Fund Fees set forth in Article 9.A. of this Agreement and Advertising Cooperative contributions and contributions set forth in Article 9.C. of this Agreement.

9.C. ADVERTISING COOPERATIVE

At all times Franchisor, in Franchisor's Reasonable Business Judgment, possesses the right to authorize, establish, designate and de-authorize a local or regional advertising cooperative within those markets that Franchisor designates (the "Advertising Cooperative"). Franchisee agrees that Franchisor possesses the sole and exclusive right to designate any geographic area in which two or more Cordova Business franchises are located as a region for the purpose of establishing an Advertising Cooperative. If Franchisee's Cordova Business or Operating Territory is located within the geographic area of an Advertising Cooperative, franchisee must participate in and contribute to the Advertising Cooperative. Franchisee agrees to the following:

  • (1) If Franchisor previously instituted or, in the future, institutes an Advertising Cooperative that includes, in whole or in part, Franchisee's Operating Territory or Franchisee's Cordova Business Location, Franchisee shall participate in and make such on-going financial contributions to the Advertising Cooperative, as determined by the Advertising Cooperative;

  • (2) Franchisor may establish foundational and organizational requirements of the Advertising Cooperative including voting provisions that allows the Advertising Cooperative to make decisions based on the simple majority vote (one vote per franchisee Cordova Business located within the designated area of the Advertising Cooperative) with a quorum constituting 25% of those franchisees within the Advertising Cooperative;

  • (5) Franchisee shall contribute to the Advertising Cooperative in the amounts as determined and required by the Advertising Cooperative or, otherwise in accordance with those documents governing the operation of the Advertising Cooperative; provided, however, Franchisee's contributions to the Advertising Cooperative shall not exceed Franchisee's local minimum marketing obligations set forth in Article 9.B. of this Agreement and Franchisee's contributions to the Advertising Cooperative shall count toward satisfaction of Franchisee's minimum local marketing obligations set forth in Article 9.B.;

  • (6) Franchisee shall submit to the Advertising Cooperative and to Franchisor such statements and reports as may be required by the Advertising Cooperative and approved by Franchisor.

Source: Item 23 — RECEIPTS (FDD pages 44–195)

What This Means (2025 FDD)

According to Cordova's 2025 Franchise Disclosure Document, 'Advertising Contributions' encompass all financial obligations a franchisee has to Cordova, its affiliates, or designees for advertising purposes. These obligations include Brand Development Fund Fees, as detailed in Article 9.A of the agreement, and contributions to the Advertising Cooperative, as outlined in Article 9.C.

If a franchisee's Cordova business is located within a designated Advertising Cooperative area, they are required to participate in and contribute to that cooperative. The amount of these contributions is determined by the Advertising Cooperative itself. However, the franchisee's total contribution to the Advertising Cooperative will not exceed the minimum local marketing obligations outlined in Article 9.B of the franchise agreement, and these contributions count toward fulfilling those minimum local marketing obligations.

Cordova retains the right to authorize, establish, designate, and de-authorize local or regional advertising cooperatives in markets it designates. The advertising cooperative is able to make decisions based on a simple majority vote, with a quorum of 25% of the franchisees within the cooperative's designated area. All marketing programs and media developed by the cooperative are subject to Cordova's review and approval. Franchisees must also submit required statements and reports to both the Advertising Cooperative and Cordova.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.