If a The Standardx franchisee chooses to participate in a Cooperative, what are the requirements?
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, the franchisor may identify a region with two or more Brand Hotels to establish an advertising cooperative. While participation in a Cooperative is not required, if a franchisee chooses to participate, they must adhere to the Cooperative's rules. These rules include paying the Hotel's allocable share for advertising, marketing, promotional, and other programs conducted by the Cooperative.
The Cooperative is responsible for its own administration and determines the contributions required from its members. Typically, all members contribute to programs at the same rate. The FDD anticipates that Cooperatives will operate from written governing documents and prepare financial statements for member franchisees to review.
All restrictions relating to advertising, marketing, or promotional materials and programs that the franchisee uses also apply to the Cooperative's materials and programs. This ensures consistency and compliance with The Standardx's brand standards across all advertising efforts, whether individual or collective. Franchisees should carefully review the Cooperative's governing documents and financial statements to understand their obligations and the Cooperative's activities before deciding to participate.