Does the Desi District franchise agreement give Desi District the power to form an advertising council?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
Advertising council. We do not have an advertising council composed of franchisees. The franchise agreement does not give us the power 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,
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 31–38)
What This Means (2024 FDD)
According to the 2024 Desi District Franchise Disclosure Document, the franchise agreement does not grant Desi District the authority to form an advertising council. However, Desi District does not have an advertising council composed of franchisees.
Desi District does retain the right to mandate franchisee participation in local or regional advertising cooperatives. The area of the cooperative will be defined based on media markets, or other geographic criteria that Desi District deems appropriate. Each franchisee within the cooperative area has one vote per outlet, unless they are in default under their franchise agreement.
The amount franchisees must contribute to the cooperative will be determined by a vote of the members, but it will not be less than 1% and not more than 5% of gross sales. If Desi District's own outlets are members of a cooperative, they must contribute on the same basis as franchisees and will vote on the same basis as other members. Desi District administers the cooperative but has the right to delegate responsibility for administration to an outside company or to the franchisee members of the cooperative. Desi District also has the power to require cooperatives to be formed, changed, dissolved, or merged.