Press Releases

FOR IMMEDIATE RELEASE - May, 10, 2003

Straw Hat Pizza Cooperative Retains AAFD Fair Franchising Seal

San Diego, CA: The American Association of Franchisees and Dealers (AAFD) has announced that the Straw Hat Pizza Cooperative has been recertified to retain the prestigious AAFD Fair Franchising Seal. Straw Hat was the first Cooperative to be accredited by the AAFD, and is the first organization to be recertified to retain the Seal.

The Fair Franchising Seal is awarded to organizations engaged in trade name licensing that are nominated by their own licensees as having an exemplary record of franchise and licensing practices that embody equity, fairness and service to the organization.

In order to earn AAFD Accreditation, the nominated company's franchise or license agreement must be consistent with the spirit of AAFD's Fair Franchising Standards, and the company must receive approval from at least 75% of its franchisees in a confidential survey conducted by the AAFD. Straw Hat's license agreement received a rating of 99% conformance to the AAFD's Fair Franchising Standards, the highest grade ever given by the AAFD's Standards Committee, and the Straw Hat Cooperative Membership voted a resounding 99% in favor of granting the award.

"We are very proud to have been nominated and honored with this distinguished seal," said Joshua Richman, President & CEO of the Straw Hat Cooperative. "It is particularly meaningful because our Members were the ones to vote for us to receive the AAFD Seal, a recognition that reflects on fairness and what I believe to be the backbone of our entire organization. In truth, this award reflects the hard work of our entire system, both Members and management, and so on behalf of the whole system, we are delighted to be recertified to receive the award."

Commented Robert Purvin, chairman of the AAFD, "The importance of the AAFD Fair Franchising Seal is that it rewards exemplary practices in the franchising marketplace. With the Seal, franchise buyers and licensees have a legitimate standard by which to judge a franchise opportunity -- an effective vote of confidence and approval by the system's own franchise owners."

According to Richard L. Rosen, Chairman of the AAFD Fair Franchising Standards Committee, "The members of the Standards Committee are gratified that the AAFD's Fair Franchising Seal has been awarded to the Straw Hat Cooperative. The Fair Franchising Standards were promulgated to set guideposts along which franchisors and franchisees could travel to reach a more equitably balanced relationship. The awarding of the Seal to the Straw Hat Pizza Cooperative is another indication that Fair Franchising is not only attainable but, in many cases, a reality."

The success of the Straw Hat Cooperative, and ultimately the award of the Fair Franchising Seal, is a testimony to the ability of the underdog to rise up and lead the way. In 1987, Straw Hat Pizza was in danger of extinction due to a proposed buyout by industry giant Pizza Hut. The franchisees at that time formed an alliance to negotiate the retention of the brand and system. The franchisees prevailed and formed a Member owned Cooperative, whose success has been demonstrated over the past 15 years.

The Straw Hat Cooperative is owned by each of the individual store owners, with each unit representing one share of ownership. The Cooperative is not-for-profit, which results in low monthly assessments totaling 2.75%. Additionally, any profit that the Cooperative might realize is distributed back to the Membership in the form of a Patronage Dividend. For 2001, the Straw Hat Cooperative distributed nearly $100,000 back to its Membership. Straw Hat President Joshua Richman feels that although a cooperative is an unusual business structure, it has demonstrated a model for fairness efficiency, and the true spirit of partnership that franchising is intended to create.

The American Association of Franchisees and Dealers is the oldest and largest direct member non-profit trade association representing the interests of franchisees and independent dealer networks throughout the United States. Stressing market solutions and franchisee empowerment through independent franchisee associations, the AAFD has grown to represent more than 12,000 franchised businesses nationwide.

For more information, contact the AAFD at 800-733-9858, or visit our website.