Is the minimum local advertising requirement for Azal Coffee franchisees separate from grand opening advertising and marketing fund contributions?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
ll those excess expenditures.
You must spend a minimum of 1% of Gross Sales each month for advertising in your local market. You must provide us with documentation, at the times and in the form and manner specified by us, to prove that you spent the required amount on local advertising, or in our discretion, we may require you to pay the minimum local advertising amounts to us for advertising in your local market. If we require you to pay the minimum local advertising amounts to us, we may use these amounts, in our discretion, for local advertising and promotion for you (including but not limited to Digital Advertising, flyers, promotions, mailers, etc.) or as part of joint advertising or cooperative advertising. If you fail to pay these amounts in your local market, you are required to remit the amounts to us as additional royalty. Your minimum local advertising requirement is separate from and in addition to your obligations for grand opening advertising and for contributions to the marketing fund. If we require you to pay the minimum local advertising
amounts to us, we will submit to you, on request, an annual report of the receipts and disbursements of those amounts, which may be unaudited and prepared by us.
We may designate a local, regional or national advertising area that includes a group of Stores (an "Advertising Area"). If your Franchise Business is in a designated Advertising Area, you must participate in and pay your proportionate cost of any joint advertising programs specified by us for that Advertising Area.
In addition, we may require an advertising cooperative to be formed and operated in an Advertising Area.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 27–36)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the minimum local advertising requirement is separate from other advertising obligations. Franchisees must spend a minimum of 1% of gross sales each month on local advertising.
This local advertising requirement is in addition to any obligations for grand opening advertising and contributions to the marketing fund. Azal Coffee may require franchisees to pay the minimum local advertising amounts to them for advertising in the local market. If Azal Coffee requires this, they may use the amounts for local advertising and promotion, such as digital advertising, flyers, promotions, and mailers, or as part of joint or cooperative advertising.
If a franchisee fails to pay the local advertising amounts, they are required to remit the amounts to Azal Coffee as additional royalty. The amounts spent for joint advertising, cooperative advertising, and promotional programs specified by Azal Coffee will apply to the minimum local advertising obligation. Franchisees, except for grand opening advertising, will not be required to spend more than 5% of gross sales per month for local advertising, joint advertising, cooperative advertising, and promotional programs, unless they agree otherwise. This limit does not apply to marketing fund contributions paid to Azal Coffee.