How does Desi District define the area of a local or regional advertising cooperative?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
ower to form an advertising council.
Local or Regional Advertising Cooperatives. We do not currently have any local or regional advertising cooperatives. We have the right to require you to participate in a local or regional advertising cooperative. We will define the area of the cooperative based on media markets, or other geographic criteria that we deem appropriate. Each franchisee in the area would have one vote per outlet (unless the franchisee is in default under its franchise agreement). The amount you must contribute to the cooperative will be determined by vote of the members, but not less than 1% and not more than 5% of gross sales. If our own outlets are members of a cooperative,
they must contribute to the cooperative on the same basis as franchisees, and they will vote on the same basis as other members. We administer the cooperative, but we have the right to delegate responsibility for administration to an outside company such as an advertising agency or accounting firm, or to the franchisee members of the cooperative. We have the right to require the cooperative to operate from written bylaws or other governing documents that we determine. The documents are not currently available for you to review. Cooperatives will prepare annual financial statements which will be made available for review only by us and by the members of cooperative. We have the power to require cooperatives to be formed, changed, dissolved, or merged.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 31–38)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, while the company does not currently have any local or regional advertising cooperatives, it retains the right to require franchisees to participate in one in the future. Desi District defines the area of these cooperatives based on media markets or other geographic criteria that it deems appropriate.
Each Desi District franchisee within the defined area would have one vote per outlet, unless they are in default of their franchise agreement. The contribution amount required from each franchisee will be determined by a vote of the members, with a minimum of 1% and a maximum of 5% of gross sales. If Desi District owns outlets within the cooperative's area, they must contribute on the same basis as franchisees and will have the same voting rights.
Desi District will administer the cooperative but has the option to delegate this responsibility to an outside company or the franchisee members. The cooperative may be required to operate under written bylaws or other governing documents determined by Desi District. Annual financial statements will be prepared by the cooperatives and made available for review by Desi District and the cooperative members. Desi District also retains the power to form, change, dissolve, or merge cooperatives.