Under what conditions might City Wide designate a local or regional advertising coverage area?
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 the 2025 City Wide Franchise Disclosure Document, City Wide has the authority to designate a local or regional advertising coverage area. This would occur when a franchisee's business and at least one other franchised City Wide business are located within the same area. The purpose of this designation is to facilitate the development of a cooperative local or regional advertising or promotional program.
If such an area is designated, franchisees within that area will be required to contribute to the cooperative advertising and promotional program. The amount each franchisee contributes will be determined by a majority (50% or more) of the franchisees within the designated dominant market area (DMA), as defined by Nielsen Media Research. The cost of the program will be allocated among the City Wide franchises in proportion to each franchisee's Gross Sales during the preceding twelve-month period, or portion of that period.
It's important to note that these cooperative advertising contributions are in addition to any other advertising expenses a franchisee is already required to spend. While City Wide currently does not have any franchisee cooperatives, it does have one franchisor-owned outlet. The FDD specifies 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 how their advertising dollars are spent within these cooperative programs.