How are contributions to a Deka Lash Local Advertising Cooperative determined?
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.
Any contributions you make towards the Cooperative will be credited against your Local Marketing Requirement.
We reserve the right to form, change, dissolve or merge any Local Advertising Cooperative. (Franchise Agreement, Section 7.5).
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, if a Local Advertising Cooperative is established for a franchisee's area, both the franchisee and franchisor-owned outlets within the cooperative are required to contribute. The contribution amount is determined by the members of the Local Advertising Cooperative, but it is subject to Deka Lash's approval. All outlets within the cooperative must contribute on the same basis, which could be a uniform percentage of revenue or a fixed amount. Each member of the cooperative has one vote for each Deka Lash Franchised Business they operate within the geographic area covered by the cooperative.
This means that a prospective Deka Lash franchisee will need to factor in potential Local Advertising Cooperative contributions in addition to the Brand Development Fee and Local Marketing Requirement. The franchisee has a say in determining the contribution amount through their vote in the cooperative, but Deka Lash retains the final approval. This ensures that the advertising efforts align with the overall brand strategy.
Any contributions made to the Local Advertising Cooperative will be credited against the franchisee's Local Marketing Requirement. Deka Lash also reserves the right to form, change, dissolve, or merge any Local Advertising Cooperative, giving them flexibility in managing advertising strategies and resource allocation. Franchisees should inquire about the likelihood of a Local Advertising Cooperative being established in their area and the typical contribution amounts to fully understand their potential advertising expenses.