Do franchisor-owned outlets contribute to the Deka Lash Local Advertising Cooperative?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
Local Advertising Cooperative. We may designate any geographic area as a region for establishing a local advertising cooperative ("Local Advertising Cooperative"), though we typically designate areas based on Designated Market Areas as determined by the A.C. Nielsen Company. The members of the Local Advertising Cooperative for any area will consist of all Franchised Businesses, as well as outlets operated by us or our affiliates. We will determine in advance how each Local Advertising Cooperative will be organized and governed and when it must start operation. Each Local Advertising Cooperative will be organized for the sole purpose of administering advertising programs and developing, subject to our approval, promotional materials for use by the members in local advertising. If a Local Advertising Cooperative has been established for a geographic area where your Franchised Business is located when the Franchise Agreement is signed, or if any Local Advertising Cooperative is established during the term of the Franchise Agreement, you must become a member of the Local Advertising Cooperative and abide by the rules of the Local Advertising Cooperative.
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, franchisor-owned outlets do contribute to the Local Advertising Cooperative if one is established in the geographic area where the franchisee's business is located. The franchisor may designate geographic areas for establishing these cooperatives, often based on Designated Market Areas determined by A.C. Nielsen Company.
If a Local Advertising Cooperative is established, both franchised businesses and outlets operated by Deka Lash or its affiliates must become members and adhere to the cooperative's rules. All outlets, including those owned by the franchisor, must contribute to the Local Advertising Cooperative. The contribution basis will be the same for all members, which could be a uniform percentage of revenue or a fixed amount, as determined by the members and subject to Deka Lash's approval.
For a prospective franchisee, this means that if a Local Advertising Cooperative is in place, they will be required to contribute to it, but so will any Deka Lash-owned outlets in the same area. The contributions made to the Cooperative will be credited against the franchisee's Local Marketing Requirement. Deka Lash retains the right to form, change, dissolve, or merge any Local Advertising Cooperative.