Under what conditions can an advertising cooperative require advertising fees from an Azal Coffee franchisee?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
advertisement. If an advertising cooperative has been or is formed for your market, the cooperative may require advertising fees be paid to the cooperative, but only if authorized by a majority vote of the members of the cooperative. As of the date of this Franchise Disclosure Document, no advertising cooperatives have been formed. The amounts spent by you for local advertising, joint advertising, cooperative advertising, and any promotional programs specified by us will apply to your minimum local advertising obligations. Except for pre-opening/grand opening advertising and any contributions to the marketing fund that we may require, you will not be required to spend more than the amounts specified in the table for local advertising, joint advertising, cooperative advertising, and promotional programs specified by us.
Source: Item 6 — OTHER FEES (FDD pages 12–19)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, an advertising cooperative may require advertising fees from franchisees only if authorized by a majority vote of the members of the cooperative. As of the date of the Franchise Disclosure Document, no advertising cooperatives have been formed for Azal Coffee.
Each Azal Coffee franchisee must spend at least 1% of monthly Gross Sales on local advertising. If a franchisee fails to pay the local advertising amount in their local market, they are required to pay the local advertising amount to Azal Coffee as additional royalty.
Franchisees also participate in joint advertising, and they will pay their proportionate share of each advertisement. The amounts spent by franchisees for local advertising, joint advertising, cooperative advertising, and any promotional programs specified by Azal Coffee will apply to their minimum local advertising obligations. Franchisees will not be required to spend more than the amounts specified in the table for local advertising, joint advertising, cooperative advertising, and promotional programs specified by Azal Coffee, except for pre-opening/grand opening advertising and any contributions to the marketing fund that Azal Coffee may require.