Does Hawaiian Bros Island Grill prohibit franchisees from joining an association of franchisees?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
relevant time period requested by Company and the way Franchisee spent those funds. Upon Company's request, Franchisee also must submit documents substantiating that Franchisee incurred and paid particular expenditures during the relevant time period.
(c) Area Cooperatives.
(1) Company may designate any geographic area in which two or more Hawaiian Bros Restaurants are located as a region for purposes of establishing an Area Cooperative, or Company may approve of the formation of an Area Cooperative by two or more Hawaiian Bros Island Grill franchisees. The members of the Area Cooperative for any area will consist of all Hawaiian Bros Restaurants located within the designated area, whether operated by Company, Company's Affiliates or Hawaiian Bros Island Grill franchisees. Company has the right to dissolve, merge or change the structure of the Area Cooperatives. Each Area Cooperative will be organized for the exclusive purposes of administering advertising programs and developing, subject to Company's approval as described above, promotional materials for use by the Area Cooperative members in
local advertising. All governing documents for an Area Cooperative are subject to Company review and approval.
- (2) If, in connection with an Area Cooperative's formation or functioning, its members are unable to resolve differences with respect to any disagreement over organization, administration, "spill" policy, contribution waivers or exceptions, budget or other matters within 45 days, the issue will be referred to Company for resolution. Company's decision with respect to the issue's resolution will be binding on all members of the Area Cooperative. In addition, Company reserves the right to review each Area Cooperative's contribution rate on an annual basis. In no event will a contribution rate exceeding the Minimum Local Ad Spend be counted toward the Ad Fund contribution rate or any contributions in any past or future time period.
Source: Item 23 — RECEIPTS (FDD pages 77–262)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for Hawaiian Bros Island Grill does not contain any information that would indicate franchisees are prohibited from forming or joining a franchisee association. However, the document does discuss Area Cooperatives. Hawaiian Bros Island Grill may designate a geographic area with two or more restaurants as a region for establishing an Area Cooperative, or approve the formation of one by two or more franchisees. All Hawaiian Bros restaurants within the designated area, whether operated by the company, its affiliates, or franchisees, will be members of the Area Cooperative. Hawaiian Bros Island Grill has the right to dissolve, merge, or change the structure of these cooperatives.
Area Cooperatives are formed exclusively to manage advertising programs and develop promotional materials for local advertising, subject to Hawaiian Bros Island Grill's approval. All governing documents for an Area Cooperative are subject to company review and approval. If members cannot resolve disagreements regarding organization, administration, budget, or other matters within 45 days, the issue is referred to Hawaiian Bros Island Grill, whose decision is binding. The company also reserves the right to review each Area Cooperative's contribution rate annually.
Franchisees are required to join, participate in, and actively support any Area Cooperative established for their geographic area. They must also make contributions to the Area Cooperative according to the payment schedule and contribution rate specified by the cooperative and approved by Hawaiian Bros Island Grill. Because the FDD does not address franchisee associations beyond these cooperatively-run advertising groups, prospective franchisees may want to inquire with the franchisor about their policies on franchisee associations.