If a Deka Lash Local Advertising Cooperative is established in my area, what am I required to do?
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, if a Local Advertising Cooperative is established in your area, you are required to become a member and adhere to its rules. Deka Lash may designate geographic areas for these cooperatives, often based on Designated Market Areas. The cooperative's members consist of all franchised businesses and outlets operated by Deka Lash or its affiliates within that area. These cooperatives are formed to manage advertising programs and develop promotional materials, subject to Deka Lash's approval, for local advertising efforts.
As a member of the Local Advertising Cooperative, you must contribute the amounts required by its members, with all outlets contributing on the same basis, whether it's a percentage of revenue or a fixed amount. The members determine the contribution amount, but Deka Lash must approve it. Each member gets one vote for each franchised business they operate within the cooperative's area. Any contributions you make to the Cooperative will be credited against your Local Marketing Requirement.
Deka Lash retains the right to form, change, dissolve, or merge any Local Advertising Cooperative. This means that the structure and requirements of the cooperative can change during the term of your Franchise Agreement. It is important to stay informed about any changes to the Local Advertising Cooperative and how they may impact your obligations and marketing strategies. This structure is fairly common in franchising, allowing for both local control and franchisor oversight of marketing efforts.