Can the Endless Summer Sweets franchisor establish a purchasing cooperative?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
- 9.4 Market Cooperatives. Franchisor may establish market advertising and promotional cooperative funds ("Market Cooperative") in any geographical areas.
If a Market Cooperative for the geographic area encompassing the Location has been established at the time Franchisee commences operations hereunder, Franchisee shall immediately become a member of such Market Cooperative.
If a Market Cooperative for the geographic area encompassing the Location is established during the term of this Agreement, Franchisee shall become a member of such Market
Cooperative within thirty (30) days. Franchisor shall not require Franchisee to be a member of more than one Market Cooperative. If Franchisor establishes a Market Cooperative:
- (a) Governance.
Each Market Cooperative will be organized and governed in a form and manner and shall commence operations on a date determined by Franchisor.
Franchisor may require the Market Cooperative to adopt bylaws or regulations prepared by Franchisor.
Unless otherwise specified by Franchisor, the activities carried on by each Market Cooperative shall be decided by a majority vote of its members.
Franchisor will be entitled to attend and participate in any meeting of a Market Cooperative.
Source: Item 23 — RECEIPTS (FDD pages 39–125)
What This Means (2024 FDD)
According to the 2024 Endless Summer Sweets Franchise Disclosure Document, the franchisor has the right to establish market advertising and promotional cooperatives. These cooperatives, referred to as "Market Cooperatives," can be created in any geographical area at the franchisor's discretion.
If a Market Cooperative exists for the area where the franchisee's location is when the franchisee starts operating, the franchisee must immediately join the cooperative. Similarly, if a Market Cooperative is established during the term of the Franchise Agreement for the franchisee's area, the franchisee is obligated to become a member within thirty days. However, Endless Summer Sweets will not require a franchisee to be a member of more than one Market Cooperative.
The franchisor determines how each Market Cooperative is organized and governed, as well as when it begins operations. Endless Summer Sweets can also require the Market Cooperative to adopt bylaws or regulations that the franchisor has prepared. Unless the franchisor specifies otherwise, the activities of each Market Cooperative are decided by a majority vote of its members, and the franchisor is entitled to attend and participate in any meeting of a Market Cooperative.