What are 1 800 Packouts Advertising Cooperative Contributions?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| National/Regional Opportunity Protection ("NROP") Fee | $500 to $2,000 per month based on the population in your Territory. See Note 2. | Payable on the 7th day of each month beginning on the payment cycle following your opening (or after 180 days of signing the agreement). | If the population of your Territory changes, we will provide you with 30 days' notice before requiring you to pay a revised NROP Fee. |
| Royalty Fee | 7% of Gross Sales3 | Due on the 15th of the month following receipt of payment from client. | If you allow an invoice to remain unpaid, the Accounts Receivable amount associated with that invoice shall have Royalty Fees and Marketing Fees owed upon your receipt of payment or after 180 days, whichever comes first. |
| Marketing Fee | 3% of Gross Sales | Due upon receipt of payment from client. | You must contribute the Marketing Fee to an advertising fund that we will operate (the "Brand Fund"). See 11 for information regarding the Brand Fund. |
| Advertising Cooperative Contributions | Established by regional advertising cooperative ("Cooperative") members | Established by Cooperative members and, if established, paid to us. | You must become a member of and contribute to any Cooperative that is established in your area. Franchisor-owned outlets in such an area will have the same voting power as othe |
Source: Item 6 — OTHER FEES (FDD pages 17–22)
What This Means (2025 FDD)
According to 1 800 Packouts' 2025 Franchise Disclosure Document, franchisees may be required to contribute to a regional advertising cooperative. The amount of these contributions is determined by the members of the regional advertising cooperative itself. If a cooperative is established in a franchisee's area, membership and contribution are mandatory. Franchisor-owned outlets within the cooperative area have the same voting power as other franchisees. These contributions are paid to 1 800 Packouts, presumably for management and allocation within the cooperative.
Advertising cooperatives are a fairly common structure in franchising, allowing franchisees in a specific geographic region to pool resources for more effective local advertising and marketing campaigns. The cooperative model allows franchisees to have a direct say in how advertising funds are spent in their region, which can lead to more targeted and effective marketing. However, it also means that franchisees must actively participate in the cooperative's decision-making processes to ensure their interests are represented.
For a prospective 1 800 Packouts franchisee, it's important to understand whether a cooperative already exists in their target area or if one is likely to be formed. They should inquire about the typical contribution amounts, how the funds are managed, and what say franchisees have in the cooperative's activities. Understanding the dynamics of the cooperative and the potential costs involved is crucial for budgeting and forecasting marketing expenses.