Under what condition is a Craters & Freighters franchisee required to pay the Cooperative Advertising fee?
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 6 — OTHER FEES (FDD pages 12–16)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, a franchisee is required to pay the Cooperative Advertising fee only if a local advertising cooperative is formed in their territory. The fee will be a proportional share, but it will not exceed 1% of the franchisee's Adjusted Gross Sales. This fee is paid as incurred. Any contributions made to the cooperative will be credited to the franchisee's Individual Advertising Expense, as detailed in Item 11 of the FDD.
This means that a Craters & Freighters franchisee's advertising obligations could potentially increase if a cooperative is formed. However, the FDD indicates that contributions to the cooperative count towards the franchisee's individual advertising requirements, which could offset the impact of this additional fee.
It is important for prospective franchisees to understand the conditions under which a cooperative might be formed and how the proportional share is determined. They should also clarify with Craters & Freighters how the Individual Advertising Expense is calculated and managed to fully understand the potential financial implications.