Who determines the amount a Mr. Sandless franchisee must contribute to an advertising cooperative?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
There are presently no advertising councils or local or regional advertising cooperatives. If an advertising cooperative is formed by our franchisees and approved by us, you must agree to contribute to the cooperative the amount agreed upon by a majority of the members of the cooperative, to pay that amount to the advertising cooperative and the times agreed upon by the majority, and abide by the cooperative's rules. The cooperative will determine who will administer the cooperative. The written governing documents will be available for review by you. Cooperatives need not prepare annual or periodic financial statements, but if they are prepared, they may be reviewed by you. We will not 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 19–25)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, if an advertising cooperative is formed and approved by Mr. Sandless, the contribution amount is determined by a majority vote of the cooperative's members. The franchisee must then contribute the agreed-upon amount at the times determined by the majority and adhere to the cooperative's rules. The cooperative also decides who will administer it, and while financial statements are not mandatory, they may be reviewed by franchisees if prepared. Mr. Sandless does not have the authority to mandate the formation, alteration, dissolution, or merging of these cooperatives.
This means that franchisees have a direct say in the advertising strategies and budget allocation within their cooperative, promoting a collaborative approach to local advertising efforts. However, it's important to note that the formation and approval of such a cooperative are contingent on Mr. Sandless's consent, giving the franchisor ultimate oversight.
Currently, there are no existing advertising councils or local/regional advertising cooperatives. If Mr. Sandless approves a cooperative in the future, franchisees will be obligated to participate and contribute as determined by the majority of its members. This system allows for localized advertising strategies tailored to specific market needs, but also requires franchisees to actively engage in the cooperative's decision-making processes to ensure their interests are represented.
Prospective franchisees should inquire about the criteria Mr. Sandless uses to approve advertising cooperatives and the potential for such cooperatives to form in their specific territories. Understanding the dynamics of these cooperatives and the level of control franchisees have over advertising funds is crucial for making informed investment decisions.