Which section of the Beauty Bungalows Franchise Agreement outlines advertising obligations?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor reserves the right to include notations in any advertisement or marketing platform, including websites or mobile applications, that Franchises are available (or similar phrasing) along with contact forms or informational pages.
An unaudited annual financial statement of the Brand Fund will be prepared within one hundred twenty (120) days of the close of Franchisor's fiscal year and will be available to Franchisee upon written request.
9.05 Marketing Cooperatives. Franchisor may designate a geographic area in which two or more Beauty Bungalows are located as an area in which to establish a marketing cooperative ("Marketing Cooperative"). If a Marketing Cooperative exists, or Franchisor establishes a Marketing Cooperative, in a geographic area encompassing Franchisee's Franchise, Franchisee must join such Marketing Cooperative. The Marketing Cooperative's members will include all Beauty Bungalows operating in the geographic area, including any Beauty Bungalows operated by Franchisor or Franchisee's affiliates, if applicable. Franchisor will determine how any Marketing Cooperative is organized and governed, but the Marketing Cooperative's members are responsible for its administration and determination of contribution levels (up to but not exceeding two percent (2%) of monthly Gross Revenue). Any contributions Franchisee makes to a required Marketing Cooperative will also count toward the Local Area Marketing Requirement. Each Marketing Cooperative will operate under written governing documents prepared by Franchisor or Franchisor's designee. Such documentation will be made available to members of the Marketing Cooperative upon reasonable request. All material decisions of the Marketing Cooperative, including contribution levels, will require the affirmative vote of at least 51% of all Beauty Bungalows operating within the Marketing Cooperative's area (including those that operated by Franchisor or Franchisor's affiliate, if any), with each Beauty Bungalows Salon Studio receiving one vote. Franchisor may collect Marketing Cooperative fees and transfer those fees to the Marketing Cooperative, or the Marketing Cooperative may collect the fees
directly, as Franchisor determines. Any fees that Franchisee pays to a Marketing Cooperative will count towards Franchisee's minimum local advertising obligation under Section 9.01. The fees imposed by the Marketing Cooperative may exceed Franchisee's required minimum local advertising obligation under Section 9.01. Franchisor may form, modify, change, dissolve, or merge Marketing Cooperatives.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 22–23)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, Section 9.01 of the Franchise Agreement outlines the local area marketing requirements for franchisees. Additionally, Section 9.05 discusses marketing cooperatives, which Beauty Bungalows may establish in a geographic area where two or more locations exist. If a marketing cooperative is established in an area encompassing a franchisee's location, the franchisee must join it.
Franchisees are required to contribute to the marketing cooperative, with contributions not exceeding two percent of monthly Gross Revenue. Fees paid to the Marketing Cooperative count towards the franchisee's minimum local advertising obligation under Section 9.01. However, the fees imposed by the Marketing Cooperative may exceed the franchisee's required minimum local advertising obligation under Section 9.01.
Beauty Bungalows retains the right to form, modify, change, dissolve, or merge Marketing Cooperatives. All material decisions of the Marketing Cooperative, including contribution levels, require the affirmative vote of at least 51% of all Beauty Bungalows operating within the Marketing Cooperative's area. This includes locations operated by Beauty Bungalows or its affiliates, with each salon studio receiving one vote.
Franchisor reserves the right to include notations in any advertisement or marketing platform, including websites or mobile applications, that Franchises are available (or similar phrasing) along with contact forms or informational pages.