Are Afuri Ramen Dumpling franchisees' local advertising expenses included in the Advertising Fee?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
Advertising Fee payments are in addition to and exclusive of any sums that you may decide to spend on local advertising and promotion.
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- Regional Advertising Cooperative. Subject to our prior written approval, 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. Our company-owned outlets will not be required to participate in or contribute to regional advertising cooperatives. 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.
Source: Item 6 — Other Fees (FDD pages 11–16)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the advertising fee does not include local advertising expenses. The advertising fee is separate from any local advertising and promotion expenses that the franchisee may decide to spend. This means that franchisees should budget for both the advertising fee and any local advertising they deem necessary.
Afuri Ramen Dumpling franchisees may also be required to contribute to a regional advertising program if 75% of the franchisees in their advertising region vote to do so. The contribution amount will be established by the vote, but cannot exceed 2% of the franchisee's revenue. Company-owned outlets are not required to participate in or contribute to regional advertising cooperatives.
This structure is fairly typical in franchising, where a national advertising fund supports brand-building and awareness, while franchisees retain the flexibility to invest in local marketing efforts that target their specific customer base. Prospective Afuri Ramen Dumpling franchisees should inquire about the typical range of local advertising expenditures for their market to develop an accurate financial projection.