If a Local Advertising Cooperative is established for a geographic area where a Deka Lash Franchised Business is located, is membership mandatory?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
- 7.5 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.
Advertising Cooperatives must operate from written governing documents and they are available for your review upon reasonable written request.
We reserve the right to form, change, dissolve, or merge any Local Advertising Cooperative.
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, if a Local Advertising Cooperative is established for the geographic area where a Deka Lash franchise is located, membership is mandatory. The FDD states that if a Local Advertising Cooperative has been established when the Franchise Agreement is signed, or if one is established during the term of the agreement, the franchisee must become a member and abide by its rules. Deka Lash may designate geographic areas for these cooperatives, typically based on Designated Market Areas as determined by the A.C. Nielsen Company.
The purpose of the Local Advertising Cooperative is to administer advertising programs and develop promotional materials for local advertising, subject to Deka Lash's approval. The franchisor determines how each cooperative will be organized, governed, and when it must begin operations.
Franchisees should be aware that Deka Lash retains the right to form, change, dissolve, or merge any Local Advertising Cooperative. Franchisees are required to contribute to the cooperative as determined by its members, with the contribution amount subject to Deka Lash's approval. Each member has one vote for each Franchised Business they operate within the cooperative's geographic area. Any contributions made to the Cooperative will be credited against the franchisee's Local Marketing Requirement.