Under what circumstances might Southern Steer establish a Local Advertising Cooperative?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to all other advertising requirements, We may from time to time, in Our sole discretion, establish local advertising cooperatives within certain areas (each a "Local Advertising Cooperative"). If We designate an area for the establishment of a Local Advertising Cooperative, the Southern Steer Businesses located within that area will form the Local Advertising Cooperative for the purpose of administering advertising programs and developing, subject to Our approval, promotional materials for use by the members of the Local Advertising Cooperative. The Local Advertising Cooperative will operate according to written by-laws approved by Us and by the majority of the franchisees making up the Local Advertising Cooperative members, on the basis of one vote for each Southern Steer Business within the Local Advertising Cooperative. In the event of a tie vote, We will cast the deciding vote.
We have the right to consent to any proposed change to the by-laws or other organizational structure of the Local Advertising Cooperative. All advertising and promotion materials used by the Local Advertising Cooperative or provided to its members must conform with Our standards. If Your Southern Steer Business is within the area We establish for a Local Advertising Cooperative, You must become a member of that Local Advertising Cooperative and contribute to the Local Advertising Cooperative the amounts designated by the governing body of that Local Advertising Cooperative, up to 1% of Gross Revenue from Your Southern Steer Business from the prior month. Any Local Advertising Cooperative fees will be applied against the amounts required for local advertising but will be in addition to the Brand Fund Contribution. At Our request, You must furnish Us with copies of the documentation evidencing Your Local Advertising Cooperative contributions as We may request.
Source: Item 11 — ITEM. 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 26–35)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, the company may establish Local Advertising Cooperatives at its discretion. These cooperatives would be formed within specific areas designated by Southern Steer. If a Local Advertising Cooperative is established in an area where a Southern Steer franchise is located, the franchisee is required to become a member.
The purpose of the Local Advertising Cooperative is to administer advertising programs and develop promotional materials for use by its members, subject to Southern Steer's approval. The cooperative operates under written by-laws that must be approved by both Southern Steer and a majority of the franchisees within the cooperative, with each Southern Steer Business having one vote. In the event of a tie, Southern Steer holds the deciding vote.
Franchisees who are members of a Local Advertising Cooperative must contribute to the cooperative, up to 1% of their Southern Steer Business's Gross Revenue from the prior month. These fees are applied against the franchisee's local advertising requirements but are in addition to any Brand Fund contributions. Southern Steer retains the right to exclude any particular Southern Steer Business from participating in a Local Advertising Cooperative, but all members, including those owned by Southern Steer or its affiliates, will contribute on the same basis. Southern Steer may also require the Local Advertising Cooperative and its members to participate in special promotions with 90 days' notice, and the cost of these promotions counts towards the franchisee's contribution to the cooperative.