Does Deka Lash have to approve the amount of contribution determined by the members of the Local Advertising Cooperative?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
If we establish a Local Advertising Cooperative for your area, you and franchisor-owned outlets in the Cooperative must contribute to the Local Advertising Cooperative the amounts required by its members, and all outlets must contribute on the same basis (which may be a uniform percent of revenue, a fixed amount, etc.). The amount of contribution will be determined by the members of the Local Advertising Cooperative, subject to our approval. Each member will have one vote for each Franchised Business operated by the member within the geographic area subject to the Local Advertising Cooperative.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 32–40)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the amount of contribution to the Local Advertising Cooperative, determined by its members, is subject to Deka Lash's approval. This cooperative is established to manage advertising programs and develop promotional materials for local advertising, with membership mandatory for franchisees in designated areas.
Franchisees and franchisor-owned outlets within the cooperative must contribute the amounts required by the members, ensuring that all outlets contribute on the same basis, whether it's a percentage of revenue or a fixed amount. However, this contribution amount is not solely decided by the members; Deka Lash retains the right to approve the final amount. Each member gets one vote per Franchised Business they operate within the cooperative's geographic area.
This approval process ensures that Deka Lash maintains control over advertising expenditures and strategies, even at the local level. Any contributions made by the franchisee to the Local Advertising Cooperative will be credited against their Local Marketing Requirement. Deka Lash also reserves the right to form, change, dissolve, or merge any Local Advertising Cooperative, giving them significant oversight in local advertising efforts.