What financial documents must a Deck Medic advertising cooperative prepare and provide to its members?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
If we establish a cooperative within a market that includes your Deck Medic Business, you must contribute to the cooperative in such amounts and frequency as determined by the cooperative. Members of the cooperative will be responsible for administering the cooperative, including determining the amount of contributions, marketing expenditures and allocations. However, we may require that cooperative decisions be made based on approval of a simple majority of franchisee members based on one vote per Deck Medic Business located and a quorum of not less than 25% of the designated franchisee cooperative members. If a cooperative exceeds nine franchisee members, we may require that the cooperative establish formal governing documents. Each cooperative must prepare annual unaudited financial statements that must be provided to each cooperative member for review. We reserve the right to form, change, dissolve, or merge any advertising cooperative. If we elect to form a local or regional cooperative or if a cooperative already exists as to the area of your Deck Medic Business, you will be required to participate in the cooperative in accordance with the provisions of our operations manual which we may supplement and modify from time to time. (Franchise Agreement, Article 9.C.). You will not be required to make contributions to a Local or Regional Advertising Cooperative in amounts exceeding 5% of your monthly Gross Sales.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 24–29)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, if a local or regional advertising cooperative is established, it must prepare annual unaudited financial statements. These statements must be provided to each cooperative member for review.
Deck Medic reserves the exclusive right to authorize, establish, designate, and de-authorize these local or regional advertising cooperatives within designated markets. The franchisor determines the geographic and other boundaries of each cooperative, considering factors like media markets (print, television, and digital). Franchisees within a cooperative's market must contribute as determined by the cooperative.
Members of the cooperative are responsible for administering it, including determining contribution amounts, marketing expenditures, and allocations. Deck Medic may require that cooperative decisions be based on a simple majority vote of franchisee members, with one vote per Deck Medic Business, and a quorum of at least 25% of the designated franchisee cooperative members. If a cooperative exceeds nine members, Deck Medic may require formal governing documents. Franchisees will not be required to contribute more than 5% of their monthly Gross Sales to a local or regional advertising cooperative. As of the FDD issuance date, Deck Medic had not established any local or regional advertising cooperatives but reserves the right to do so in the future.