Who determines contributions to The Standardx Cooperative?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
We may identify a region in which 2 or more Brand Hotels are located (including, if applicable, those that we or our affiliates own or operate) to establish a local or regional advertising cooperative (a "Cooperative"). We may form, change, dissolve and merge Cooperatives. The Cooperative's purpose will be to collect funds from its members and to plan, discuss, organize, develop, utilize, produce, disseminate, and implement marketing, advertising and promotional programs and materials on a collective basis (and to cover related expenses) for participating Brand Hotels. We will not require you to participate in a Cooperative. However, if you choose to
participate in the Cooperative, you must do so according to the Cooperative's rules, including by paying your Hotel's allocable share for any advertising, marketing, promotional and other programs that the Cooperative conducts. The Cooperative will be in charge of its own administration and determines contributions. Cooperative members will typically contribute to programs at the same rate. We anticipate that Cooperatives will operate from written governing documents and prepare financial statements that member franchisees may review. All restrictions relating to any advertising, marketing or promotional materials and programs that you use or conduct also apply to any materials and programs that the Cooperative will use or conduct. (Section 5.5 of Franchise Agreement)
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 48–64)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, if a franchisee chooses to participate in a local or regional advertising cooperative, the cooperative itself determines the contributions required from its members. The Standardx may establish these cooperatives in regions with two or more Brand Hotels, with the aim of pooling funds for collective marketing and promotional activities.
The FDD specifies that while participation in a Cooperative is not mandatory, franchisees who opt-in must adhere to the Cooperative's rules, including paying their share of advertising, marketing, and promotional program costs. Typically, all members of the Cooperative contribute to programs at the same rate.
This arrangement means that franchisees have a degree of autonomy in deciding whether to engage in cooperative advertising efforts. However, if they choose to participate, they cede control over contribution amounts to the Cooperative's administration. Prospective franchisees should inquire about the typical structure and governance of these Cooperatives to understand how contribution rates are set and how funds are managed, as well as the financial statements that member franchisees may review.