Is Craters & Freighters obligated to establish Cooperatives?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
We are not required to spend an amount on advertising in the territory where you are or will be located. We do not have any local or regional advertising cooperatives. We may designate any geographic area in which two or more Craters & Freighters outlets are located as a region for establishing a Cooperative. The members of the Cooperative for any area will consist of all Craters & Freighters outlets, whether franchised or operated by
us or our Affiliates. We will determine in advance how each Cooperative will be organized and governed and when it must commence operations. Accordingly, we do not currently have any governing documents available for review. Each Cooperative will be organized for the sole purposes of administering advertising programs and developing, subject to our approval, promotional materials for use by the members in local advertising. If a Cooperative has been established for a geographic area where your Craters & Freighters Franchised Business is located when the Franchise Agreement is signed, or if any Cooperative is established during the term of the Franchise Agreement, you must become a member of the Cooperative and abide by the rules of the Cooperative. Cooperatives will set their own fees, which cannot exceed one percent (1%) of Adjusted Gross Sales. Franchisor-owned outlets must contribute to the fund on the same basis as franchisees. Each Cooperative established must prepare annual statements which will be available for review by its members. We reserve the right to form, change, dissolve or merge any Cooperative at any time.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 22–29)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, Craters & Freighters is not obligated to establish local or regional advertising cooperatives. However, Craters & Freighters has the option to designate any geographic area with two or more Craters & Freighters outlets as a region for establishing a Cooperative.
The membership of a Cooperative will consist of all Craters & Freighters outlets, whether franchised or operated by Craters & Freighters or its affiliates, within the designated area. Craters & Freighters will determine the organization, governance, and commencement of operations for each Cooperative.
If a Cooperative exists in the franchisee's area when the Franchise Agreement is signed, or if one is established during the agreement's term, the franchisee must join and adhere to its rules. Cooperatives set their own fees, capped at one percent (1%) of Adjusted Gross Sales, with franchisor-owned outlets contributing on the same basis as franchisees. Each Cooperative must prepare annual statements available for member review, and Craters & Freighters reserves the right to form, change, dissolve, or merge any Cooperative at any time.