How is the cost of a cooperative advertising program allocated among City Wide franchisees?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
CITY WIDE has the right to require cooperatives to be formed, dissolved or merged. For example, CITY WIDE may designate a local or regional advertising coverage area in which your Franchised Business and at least one other Franchised Business is located for purposes of developing a cooperative local or regional advertising or promotional program. You will contribute your share to such cooperative advertising and promotional program agreed upon by 50% or more of the Franchised Businesses within the designated dominant market area ("DMA") as defined by Nielsen Media Research, a company of the Dun & Bradstreet Corporation, or comparable industry designation. The cost of the program will be allocated among each CITY WIDE Franchised Business in such area and each franchisee's share will be in proportion to its Gross Sales during the preceding twelve-month period, or portion of that period. Such payments will be in addition to and exclusive of any other sums you are required to spend on advertising.
Currently, however, CITY WIDE has no franchisee cooperatives, but does have one franchisorowned outlet. CITY WIDE owned outlets do not have controlling voting power on fees imposed by any franchisee cooperatives formed in the future.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 29–36)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide has the authority to mandate the formation, dissolution, or merging of advertising cooperatives. These cooperatives may be formed in a local or regional advertising coverage area that includes a franchisee's business and at least one other franchise. Franchisees are required to contribute to these cooperative advertising and promotional programs, provided that 50% or more of the franchisees within the designated dominant market area (DMA), as defined by Nielsen Media Research, agree to the program.
The cost of the cooperative advertising program is allocated among City Wide franchisees within the designated area. Each franchisee's share of the cost is proportional to their Gross Sales during the preceding twelve-month period, or portion of that period if the business has not been operating for a full year. These payments are in addition to any other advertising expenses that franchisees are required to spend.
It's important to note that currently, City Wide has no franchisee cooperatives, but it does have one franchisor-owned outlet. The franchisor-owned outlets do not have controlling voting power on fees imposed by any franchisee cooperatives formed in the future. This means that franchisees will have a say in how cooperative advertising programs are run and funded, and the franchisor cannot unilaterally impose fees or programs on them.