Terre Foods FAQ
 

Frequently Asked Questions

Starting a new retail cooperative is a big job, and there are lots of questions folks have about the process.  Here are some of the most frequent ones we receive.  If you have a question that you don't see addressed here, please ask.  Maybe it'll show up on the next update of this page!

What is a cooperative (versus a regular corporation, partnership, or sole proprietor ownership)?
The hallmark of a retail cooperative is that it is a business owned by a large number of community members or patrons who have come together to run the store.  Individuals become owners by purchasing equity in the store.  Purchasing equity confers certain rights and responsibilities on the individual:  a member-owner has the right to vote on Board of Directors, to run for the Board, to vote on various other issues or petition the Board; s/he may enjoy patronage refunds or special discounts; s/he has a responsibility to participate in the cooperative to the extent s/he is able and willing, giving input and guidance, and accepting a certain amount of risk by investing in the venture.

Cooperatives differ from other sorts of businesses primarily via this owner relationship.  Traditional corporations sell shares of their stock, and the more shares one owns, the more votes one gets (as well as the more dividend payments one gets, and the more risk one takes).  Cooperatives are a one-person, one-vote system; patronage refunds are based on the amount each member-owner uses the cooperative, not based on the amount of equity put up by that person, and the fair-share equity for ownership will be the same for everyone.  All member-owners are equal partners in the ownership of the store.  As there are very many member-owners, cooperatives are typically governed by a Board of Directors, rather than via direct governing, as in a traditional partnership.  The Board is elected by its membership, and has term limits for all positions.

Can anyone shop at a co-op, or only members?
Anyone can shop at a retail cooperative!  Member-owners do receive certain benefits from ownership, which may not be available to non-members, but anyone can shop at the store regardless of membership status.

Where will your store be?  Have you decided on a site yet?
We have commissioned a market study, which was conducted in February 2009.  The study indicated two locations in the downtown area that are very favorable for opening a cooperative market. Now that we have surpassed our 600 membership goal, we are able to begin speaking with property owners and realtors.  
 
How long until you're open?
 
We will be able to open the store once our membership goal is completed, and we are able to finalize our financing.  As of now, we have over 642 members, which is allowing us to pursue our larger financing goals!
 
But why so long?!
Believe me, no one is more impatient for this store to be open than us!  But what is more important than getting the store open is doing it right.  We are asking the community to come together and pledge their support and their money  to making this store a reality.  It is our duty to act responsibly with the given efforts and money, and we take this very seriously.  By proceeding slowly, and in accord with the Best Practices recommendations of organizations like Food Co-op 500 and the Cooperative Development Services, we will be giving this store the best chance at success we can.  We feel that this is worth the extra time and effort, and we hope you agree!

How can I become a member-owner?
Visit our Membership page for all of the details.  You can download a membership application to fill out and mail in, or you can become a member online via Paypal.
 
What is the difference between member equity and member shares?  I've seen discussion about both.
There is no difference, really, except for a manner of speaking.  Technically, and legally, the cooperative will offer shares of its business for people to purchase to become owners.  However, these shares do not operate the way traditional corporate shares work -- an individual cannot buy more than one share or have more than one vote and benefits of ownership are not tied to how many shares one owns.  As such, it is frequently easier to speak in terms of equity rather than shares, as it more accurately reflects the actual situation of various community members putting up equal amounts of money to enter a shared-owner relationship.

Are you a for-profit or not-for-profit?
We are incorporated as a for-profit corporation in the State of Indiana.  Ideally, we would have incorporated as a cooperative entity; however, Indiana does not have the relevant statutes in our code of law to allow such an incorporation.  While we are a for-profit entity, our business will be structured to act and run very much in a not-for-profit manner.  The focus of our business will not be profit, except inasmuch as we need to turn a profit to remain a viable business and to reinvest in our store.  Please read through our bylaws (.pdf file) at your convenience to see how the business will be structured, and feel free to ask any questions you might have by visiting our Contact Us page.
 
Is any donation I make to Terre Foods tax-deductible?
No.  Our organization will be a retail store and, as such, will never be eligible for tax-exempt status even if we could have been a not-for-profit.  So any donations to us will not be tax deductible.  But it will be money which stays in the tax-pool for Vigo County and will benefit our community.
 
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