What does 'Advertising Contributions' refer to regarding franchisee obligations to C3 Wellness Spa?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
- (1) If Franchisor previously instituted or, in the future, institutes an Advertising Cooperative that includes, in whole or in part, Franchisee's Designated Territory or Franchisee's Spa Location, Franchisee shall participate in and make such on-going financial contributions to the Advertising Cooperative, as determined by the Advertising Cooperative;
- (2) Franchisor may establish foundational and organizational requirements of the Advertising Cooperative including voting provisions that allows the Advertising Cooperative to make decisions based on the simple majority vote (1 vote per franchisee Spa located within the designated area of the Advertising Cooperative) with a quorum constituting 25% of those franchisees within the Advertising Cooperative;
- (3) Unless otherwise authorized and approved by Franchisor in writing, each Advertising Cooperative shall be organized for the exclusive purpose of administering marketing programs and the development of media (all subject to the review and approval of Franchisor) for use by members of the Advertising Cooperative in local or regional marketing;
- (4) If at the time of execution of this Agreement an Advertising Cooperative has been established for a geographic area that includes, in whole or in part, Franchisee's Spa location or Designated Territory, or if such Advertising Cooperative is established during the Term of this Agreement, Franchisee shall fully participate in the Advertising Cooperative and Franchisee shall execute, at the request of Franchisor, all documents required by Franchisor and Franchisee shall become a member of the Advertising Cooperative subject to the terms of those documents;
- (5) Franchisee shall contribute to the Advertising Cooperative in the amounts as determined and required by the Advertising Cooperative or, otherwise in accordance with those documents governing the operation of the Advertising Cooperative; provided, however, Franchisee's contributions to the Advertising Cooperative shall not exceed Franchisee's local minimum marketing obligations set forth in Article 9.B. of this Agreement and Franchisee's contributions to the Advertising Cooperative shall count toward satisfaction of Franchisee's minimum local marketing obligations set forth in Article 9.B.;
- (6) Franchisee shall submit to the Advertising Cooperative and to Franchisor such statements and reports as may be required by the Advertising Cooperative and approved by Franchisor. All contributions to the Advertising Cooperative shall be maintained and administered in accordance with the documents governing the Advertising Cooperative. The Advertising Cooperative shall be operated solely for the purpose of collection and expenditure of the Advertising Cooperative's fees for the purpose set forth in this Article 9.F.;
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, 'Advertising Contributions' detail a franchisee's financial obligations and participation requirements related to advertising and marketing efforts. If C3 Wellness Spa establishes an Advertising Cooperative that includes the franchisee's territory or spa location, the franchisee is obligated to participate and contribute financially as determined by the cooperative.
The Advertising Cooperative's foundational and organizational requirements are set by C3 Wellness Spa, including voting provisions where decisions are made by a simple majority vote, with each spa location within the cooperative having one vote. A quorum is established when 25% of the franchisees within the cooperative participate. The Advertising Cooperative is exclusively dedicated to administering marketing programs and developing media, all subject to C3 Wellness Spa's review and approval, for use by its members in local or regional marketing.
If an Advertising Cooperative already exists at the time the Franchise Agreement is executed, or if one is established during the term of the agreement, the franchisee must fully participate and execute all required documents to become a member. The franchisee's contributions to the Advertising Cooperative are determined by the cooperative but cannot exceed the franchisee's local minimum marketing obligations as outlined in Article 9.B of the Franchise Agreement. These contributions count toward fulfilling the franchisee's minimum local marketing obligations.
The franchisee is required to submit statements and reports to both the Advertising Cooperative and C3 Wellness Spa as requested. All contributions are managed according to the documents governing the Advertising Cooperative, which is operated solely for collecting and spending fees for the purposes outlined in Article 9.F. This ensures that advertising funds are used specifically for marketing and promotional activities to benefit the cooperative members.