Can contributions to an Extreme Art Studio Local Advertising Cooperative be capped, and if so, how?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- 9.4.2 If we establish a Local Advertising Cooperative in your geographic area pursuant to this Section 9.4, you agree to participate and contribute your share, as determined by the members of the Local Advertising Cooperative, to such Local Advertising Cooperative for each Extreme Art Studio Business that you own that exists within the Local Advertising Cooperative's area. Your contributions to a Local Advertising Cooperative will be credited to your Local Advertising Requirement described in Section 9.2, and payable within five days after the end of the calendar month (or as we designate). Your contributions to a Local Advertising Cooperative may also be capped based on the provisions of the bylaws adopted by the Local Advertising Cooperative, subject to our approval. You will pay these monies to us electronically, and we will remit them periodically to the Local Advertising Cooperative. Extreme Art Studio Businesses owned by us or our affiliates will contribute to their respective Local Advertising Cooperative on the same basis as our franchise owners. Members of the cooperative will be responsible for administering the cooperative, including determining the amount of contributions from each member.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, contributions to a Local Advertising Cooperative can be capped. The contributions may be capped based on the provisions of the bylaws adopted by the Local Advertising Cooperative, but this is subject to Extreme Art Studio's approval.
Extreme Art Studio, or its affiliates, may establish a Local Advertising Cooperative in geographical areas where two or more Extreme Art Studio businesses operate. If a Local Advertising Cooperative is established in the franchisee's area, the franchisee must become a member and participate as required by the cooperative's documents. The purpose of the Local Advertising Cooperative is to administer advertising programs and develop advertising, marketing, and promotional materials for the area it covers, with Extreme Art Studio's approval.
The members of the Local Advertising Cooperative determine each member's share of contributions. These contributions are credited toward the franchisee's Local Advertising Requirement, which is $500 per month, and are payable within five days after the end of the calendar month. Franchisees pay these monies electronically to Extreme Art Studio, which then remits them to the Local Advertising Cooperative. Extreme Art Studio businesses owned by Extreme Art Studio or its affiliates contribute to their Local Advertising Cooperative on the same basis as franchisees.