When are contributions to a Local Advertising Cooperative payable for an Extreme Art Studio franchise?
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 are payable within five days after the end of the calendar month, or as otherwise designated by Extreme Art Studio. These contributions are credited towards the franchisee's Local Advertising Requirement, as detailed in Section 9.2 of the Franchise Agreement. Franchisees are required to make these payments electronically to Extreme Art Studio, which will then remit the funds periodically to the Local Advertising Cooperative.
This arrangement means that Extreme Art Studio franchisees must budget for these advertising expenses and ensure timely electronic payments to avoid any potential penalties or breaches of the franchise agreement. The amount of the contribution is determined by the members of the Local Advertising Cooperative and may be capped based on the bylaws adopted by the cooperative, subject to Extreme Art Studio's approval. This provides some level of control and predictability over the advertising expenses.
Extreme Art Studio also clarifies that its own company-owned or affiliate-owned businesses will contribute to the Local Advertising Cooperative on the same basis as the franchisees, ensuring equitable participation. The members of the cooperative are responsible for administering the cooperative, including determining the contribution amounts from each member. This setup allows for a collaborative approach to local advertising strategies, with Extreme Art Studio retaining final approval over advertising plans and materials.