Who determines the amount of the Market Cooperative Contribution for Desi District franchisees?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Market Cooperative Contribution | As determined by co-op. Currently, none. | Weekly, on Tuesday | We have the right to establish local or regional advertising cooperatives. The maximum contribution that a co-op may require is 5% of gross sales. Any location owned by us or any affiliate will have the same voting rights as our franchisees. Dues will be imposed by a majority vote and will not be less than 1% of gross sales. If any location owned by us or any affiliates have a majority vote, the maximum fees imposed will not exceed 3% of gross sales. |
Source: Item 6 — OTHER FEES (FDD pages 16–20)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the Market Cooperative Contribution amount is determined by the cooperative itself. Currently, there is no market cooperative contribution required. Desi District retains the right to establish local or regional advertising cooperatives.
The maximum contribution that a co-op may require is 5% of gross sales. Dues will be imposed by a majority vote and will not be less than 1% of gross sales. Any location owned by Desi District or its affiliates will have the same voting rights as franchisees.
If any location owned by Desi District or its affiliates has a majority vote, the maximum fees imposed will not exceed 3% of gross sales. This means that Desi District or its affiliates could potentially control the cooperative's decisions regarding the contribution amount, which could impact franchisees' marketing expenses.