If a Craters & Freighters franchisee contributes to a local advertising cooperative, how are those contributions treated?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Cooperative Advertising | Proportional share to be determined, but not to exceed 1% of Adjusted Gross Sales. | As incurred. | Payable only if a local advertising cooperative (“Cooperative”) is formed in your Territory. Any contributions you make to the Cooperative will be credited to your Individual Advertising Expense (as described in Item 11). |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 16–18)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, if a local advertising cooperative is formed in a franchisee's territory, contributions to that cooperative will be credited towards the franchisee's individual advertising expenses. The proportional share for cooperative advertising will be determined but will not exceed 1% of the franchisee's adjusted gross sales. These contributions are payable as they are incurred.
This means that while Craters & Freighters franchisees may need to allocate a portion of their revenue to a local advertising cooperative, that money directly benefits their own advertising efforts. The 1% cap on adjusted gross sales provides a limit to how much a franchisee might contribute, aiding in financial planning. This setup ensures that contributions are used to boost local brand awareness and drive business within the franchisee's specific territory.
For a prospective Craters & Freighters franchisee, it's important to understand the potential for a local advertising cooperative to be formed in their territory. They should inquire about the likelihood of such a cooperative, how it would be managed, and what specific advertising activities it would undertake. Understanding these factors will help a franchisee budget effectively and assess the potential return on investment from cooperative advertising efforts.