Can Crave Cookies Franchising establish market advertising cooperatives?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
ting Fund on reasonable terms.
- (f) Financial Statement. Crave Cookies Franchising will prepare an unaudited annual financial statement of the Marketing Fund within 120 days of the close of Crave Cookies Franchising's fiscal year and will provide the financial statement to Franchisee upon request.
- 9.4 Market Cooperatives. Crave Cookies Franchising may establish market advertising and promotional cooperative funds ("Market Cooperative") in any geographical areas. If a Market Cooperative for the geographic area encompassing the Location has been established at the time Franchisee commences operations hereunder, Franchisee shall immediately become a member of such Market Cooperative. If a Market Cooperative for the geographic area encompassing the Location is established during the term of this Agreement, Franchisee shall become a member of such Market Cooperative within 30 days. Crave Cookies Franchising shall not require Franchisee to be a member of more than one Market Cooperative. If Crave Cookies Franchising establishes a Market Cooperative:
- (a) Governance. Each Market Cooperative will be organized and governed in a form and manner, and shall commence operations on a date, determined by Crave Cookies Franchising. Crave Cookies Franchising may require the Market Cooperative to adopt bylaws or regulations prepared by Crave Cookies Franchising. Unless otherwise specified by Crave
Cookies Franchising, the activities carried on by each Market Cooperative shall be decided by a majority vote of its members. Crave Cookies Franchising will be entitled to attend and participate in any meeting of a Market Cooperative. Any Crave Cookies business owned by Crave Cookies Franchising in the Market Cooperative shall have the same voting rights as those owned by its franchisees. Each Business owner will be entitled to cast one vote for each Business owned, provided, however, that a franchisee shall not be entitled to vote if it is in default under its franchise agreement. If the members of a Market Cooperative are unable or fail to determine the manner in which Market Cooperative monies will be spent, Crave Cookies Franchising may assume this decision-making authority after 10 days' notice to the members of the Market Cooperative.
- (b) Purpose. Each Market Cooperative shall be devoted exclusively to administering regional advertising and marketing programs and developing (subject to Crave Cookies Franchising's approval) standardized promotional materials for use by the members in local advertising and promotion.
- (c) Approval. No advertising or promotional plans or materials may be used by a Market Cooperative or furnished to its members without the prior approval of Crave Cookies Franchising pursuant to Section 9.1. Crave Cookies Franchising may designate the national or regional advertising agencies used by the Market Cooperative.
- (d) Funding. The majority vote of the Market Cooperative will determine the dues to be paid by members of the Market Cooperative, including Franchisee, but not less than 1% and not more than 5% of Gross Sales.
- (e) Enforcement. Only Crave Cookies Franchising will have the right to enforce the obligations of franchisees who are members of a Market Cooperative to contribute to the Market Cooperative.
- (f) Termination. Crave Cookies Franchising may terminate any Market Cooperative. Any funds left in a Market Cooperative upon termination will be transferred to the Marketing Fund.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, Crave Cookies Franchising has the authority to establish market advertising and promotional cooperatives, referred to as "Market Cooperatives," in any geographical area. If a Market Cooperative is already in place when a franchisee begins operations in a location, the franchisee must immediately join. If a Market Cooperative is established later, the franchisee has 30 days to become a member. Crave Cookies Franchising will not require a franchisee to be part of more than one Market Cooperative.
Crave Cookies Franchising determines the organization, governance, and start date of each Market Cooperative and may require the adoption of bylaws or regulations it prepares. Unless Crave Cookies Franchising specifies otherwise, the activities of the Market Cooperative are decided by a majority vote of its members. Crave Cookies Franchising can attend and participate in meetings and has the same voting rights as franchisees for any Crave Cookies business it owns within the Market Cooperative. Each business owner gets one vote per business, but a franchisee in default under their franchise agreement cannot vote. If the members can't agree on how to spend the Market Cooperative's funds, Crave Cookies Franchising can take over the decision-making after giving 10 days' notice.
The purpose of each Market Cooperative is to manage regional advertising and marketing programs and to develop standardized promotional materials for members' local advertising, subject to Crave Cookies Franchising's approval. All advertising and promotional plans must be approved by Crave Cookies Franchising, which may also designate the advertising agencies used by the Market Cooperative. Funding for the Market Cooperative is determined by a majority vote of the members, with dues ranging from 1% to 5% of Gross Sales. Crave Cookies Franchising is solely responsible for enforcing the obligations of franchisees to contribute to the Market Cooperative and can terminate any Market Cooperative, with remaining funds transferred to the Marketing Fund.