Can Desi District delegate responsibility for administration of the advertising cooperative?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
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, Desi District administers the local or regional advertising cooperative, but they have the right to delegate this responsibility. Desi District can delegate administration to an outside company, such as an advertising agency or accounting firm. Alternatively, Desi District can delegate responsibility to the franchisee members of the cooperative.
Desi District also has the right to require the cooperative to operate from written bylaws or other governing documents that they determine. These documents are not currently available for review. The cooperative will prepare annual financial statements, but these statements will only be available for review by Desi District and the members of the cooperative.
Desi District also retains significant control over the cooperatives, as they have the power to require cooperatives to be formed, changed, dissolved, or merged. This means that while franchisees may participate in a cooperative, Desi District ultimately decides its structure and existence.