Purchasing Cooperatives: Leveraging a Supply Chain for Competitive Advantage


Purchasing cooperatives pose a unique opportunity for franchise systems to utilize joint collaboration between the franchisor and franchisees and reduce basic costs. Purchasing cooperatives have legal issues most franchise practitioners do not often encounter, but as this article indicates, none should be insurmountable.

This article provides overviews of:

  • issues related to determining the feasibility of using one in a franchise system,
  • basic organizational options for a purchasing cooperative,
  • significant fiduciary and other responsibilities that a franchisor and its franchisees may undertake as members and directors of the cooperative, and
  • best practices for tackling the significant business, allocation of control, and liability concerns that arise in conjunction with the formation of a purchasing cooperative.

To read the full article, click on the PDF linked below.

Copyright © 2010 American Bar Association. Produced by ABA Publishing. Reprinted with permission from Franchise Law Journal, Volume 29, Number 3, Winter 2010. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

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