Can Afuri Ramen Dumpling establish or modify advertising regions?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
At any time, we will have the right to create or modify advertising regions for the purpose of establishing regional advertising, marketing, and promotional programs. We will promptly notify you and our other franchisees, of the establishment, modification, and geographical boundaries of regional advertising regions. We may require all franchisees located within each geographic region to meet periodically for the purpose of creating and establishing regional advertising programs. Each franchise unit, and each unit we own and operate, will be entitled to one vote at these meetings. For the purpose of this subsection, each unit we own will be deemed to be a franchise.
If at any meeting of the franchisees in an advertising region, 75% of the franchisees vote to contribute to a regional advertising program, all franchisees within that region will be obligated to make a contribution to a regional advertising fund in the amount established by the vote (the "Regional Advertising Fund"). No advertising region may require any franchisee in that region to make a contribution to a Regional Advertising Fund in excess of 2% of that franchisee's Revenue (as defined in Section 2.6).
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the company has the authority to establish or modify advertising regions. Specifically, Afuri Ramen Dumpling retains the right to create or modify advertising regions for establishing regional advertising, marketing, and promotional programs. The company will then promptly inform franchisees of these changes, including the geographical boundaries of the advertising regions.
Afuri Ramen Dumpling may require franchisees within a specific geographic region to meet regularly to create and establish regional advertising programs. In these meetings, each franchise unit, including those owned and operated by Afuri Ramen Dumpling, has one vote. This means that the company's corporate-owned locations also have a say in regional advertising decisions.
If 75% of the franchisees in an advertising region vote to contribute to a regional advertising program, all franchisees within that region are obligated to contribute to the Regional Advertising Fund. However, the contribution cannot exceed 2% of the franchisee's revenue. This ensures that while franchisees can collectively decide to invest in regional advertising, there is a limit to how much each franchisee can be required to contribute. This system allows for regional flexibility in advertising while also ensuring that Afuri Ramen Dumpling maintains overall control and the ability to implement system-wide changes.