Which section of the Franchise Agreement addresses advertising obligations for a Body Brain Center franchise?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 11: FRANCHISOR'S ASSISTANCE**, ADVERTISING, **COMPUTER SYSTEMS AND TRAINING]
Advertising Fund (Sections 9.1)
We have established and administer an advertising fund. We administer a single advertising fund for Body & Brain home-based franchisees and Body & Brain Center franchisees. The advertising fund will be used for local, regional or national marketing, advertising, sales promotion and promotional materials, public and consumer relations, publicity, website development,search engine optimization and any other programs that we deem necessary or appropriate. Currently, we intend to use the advertising fund to further develop the publicly accessible Body & Brain website to promote the brand and Body & Brain Centers and Body & Brain home-based franchises. The advertising fund may also be used to pay for the creation of marketing materials that our franchisees may use for local marketing purposes.
Advertising Cooperatives (Section 9.4)
We may, but need not, form one or more advertising cooperatives for the benefit of all Body & Brain Centers located within a particular region. If your Center is located within a region subject to an advertising cooperative, you must pay the cooperative advertising fee, which will not exceed 0.5% of Program Sales. We have the right to allocate any portion of the advertising fund fees to an advertising cooperative. We also have the right to determine the composition of all geographic territories and market areas for the implementation of each advertising cooperative. Generally, the boundaries of an advertising cooperative will coincide with a city's metropolitan area.
If we implement an advertising cooperative in a particular region, we have the right to establish an advertising council to self-administer the cooperative or we can administer the cooperative ourselves. You must participate in the council according to the council's rules and procedures and you must abide by the council's decisions. Advertising cooperatives are not required to operate from written governing documents. Advertising cooperatives will prepare annual or periodic financial statements. These financial statements will be made available to franchisees within the advertising cooperative upon request. We reserve the right to form, change, merge or dissolve advertising cooperatives in our discretion.
Local Advertising (Section 9.3 & 9.5)
We do not require that you spend any minimum amount on local advertising. We will provide you with standardized marketing plans and advertising, promotional and marketing materials. Alternatively, we may enter into relationships with approved or designated suppliers who will create advertising or marketing materials that must be purchased and utilized by Body & Brain franchisees. You will also have an opportunity to create advertising for your own use, provided we approve it in advance. You may not use any advertising materials that have not been approved by us. You must submit to us any advertising materials prepared by you and we will have 5 business days to review and either approve or reject the materials. If we fail to respond within the 5 day period, the materials are deemed approved. We may later disapprove of materials that we previously approved.
Advisory Council (Section 11)
Source: Item 11 — FRANCHISOR'S ASSISTANCE**, ADVERTISING, **COMPUTER SYSTEMS AND TRAINING (FDD pages 20–29)
What This Means (2025 FDD)
According to Body Brain Center's 2025 Franchise Disclosure Document, several sections within Item 11 address advertising obligations. Specifically, Section 9.1 discusses the Advertising Fund, detailing its purpose and how it's used for marketing, advertising, and promotional activities at the local, regional, or national level. Section 9.3 and 9.5 cover local advertising, outlining Body Brain Center's role in providing standardized marketing plans and the franchisee's ability to create their own advertising materials with franchisor approval. Section 9.4 addresses advertising cooperatives, including the franchisee's obligation to pay cooperative advertising fees if their center is located within a region subject to such a cooperative. Section 11 pertains to the Advisory Council.
These sections are important for prospective Body Brain Center franchisees as they clarify the financial obligations related to advertising, the level of control the franchisor exerts over advertising content and strategies, and the opportunities for franchisees to engage in local advertising efforts. The advertising fund fee is 0.5% of Program Sales. The franchisor has complete control over all advertising programs. Franchisees must get approval from Body & Brain for their own advertising materials.
Understanding these advertising obligations is crucial for budgeting and planning marketing strategies. Franchisees should pay close attention to the terms and conditions outlined in these sections to ensure compliance and maximize the effectiveness of their advertising efforts. Furthermore, the FDD specifies that the advertising fund fees will be kept in a separate account and revenues received will be accounted for separately from Body Brain Center's other funds. During the fiscal year ended December 31, 2024, Body Brain Center spent the advertising fund fees in the following manner: 0% for production; 14% for media placement; 0% for administrative expenses; and 86% for other purposes.
It is also important to note that Body Brain Center does not require franchisees to spend any minimum amount on local advertising. This provides franchisees with some flexibility in tailoring their advertising efforts to their specific market and budget. However, franchisees must still adhere to the franchisor's guidelines and obtain approval for any advertising materials they create. The franchisor may form one or more advertising cooperatives for the benefit of all Body & Brain Centers located within a particular region. If a Body Brain Center is located within a region subject to an advertising cooperative, the franchisee must pay the cooperative advertising fee, which will not exceed 0.5% of Program Sales.