Does Ella Cafe currently have any local or regional advertising cooperatives?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
Currently, no advertising council has been established for the franchise system.
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 Coffee House (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 Coffee House 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 24–33)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, the company does not currently have any local or regional advertising cooperatives established for its franchise system. However, Ella Cafe retains the right to mandate franchisee participation in such cooperatives in the future.
If Ella Cafe decides to establish these cooperatives, the FDD specifies that the cooperative's area will be determined based on media markets or other geographic criteria deemed appropriate by Ella Cafe. Each franchisee within the cooperative area would have one vote per Coffee House, 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, but it will range between 1% and 5% of Gross Sales. If Ella Cafe owns Coffee Houses within the cooperative, they will contribute and vote on the same basis as the franchisees.
Ella Cafe will administer the cooperative, but they have the option to delegate this responsibility to an outside entity, such as an advertising agency, accounting firm, or the franchisee members themselves. Ella Cafe also has the right to require the cooperative to operate under written bylaws or other governing documents that they determine. These documents are not currently available for franchisee review. The cooperatives will prepare annual financial statements, which will be accessible for review by Ella Cafe and the cooperative members only. Ella Cafe retains the power to form, change, dissolve, or merge cooperatives as they see fit. This structure gives Ella Cafe significant control over the advertising efforts and financial management of any future cooperatives.