Does City Wide have the right to require the formation, dissolution, or merger of advertising cooperatives?
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 retains the right to mandate the formation, dissolution, or merger of advertising cooperatives. This means that City Wide can require franchisees to participate in cooperative advertising programs within a designated local or regional area. These areas are defined as dominant market areas (DMA) by Nielsen Media Research.
Franchisees are obligated to contribute to these cooperative advertising programs, with the cost of the program allocated among franchisees in proportion to their Gross Sales during the preceding twelve-month period. Participation in these advertising cooperatives is determined by a majority vote (50% or more) of the franchisees within the designated DMA. These payments are in addition to any other advertising expenses the franchisee is required to spend.
Currently, City Wide has no franchisee cooperatives but does have one franchisor-owned outlet. It is important to note that City Wide-owned outlets do not have controlling voting power on fees imposed by any franchisee cooperatives formed in the future. This ensures that franchisees have a say in the advertising programs and fees associated with them.