Do all Extreme Art Studio franchisees contribute to the Brand Fund on the same basis?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
We have a Brand Fund for marketing, developing and promoting the System, the Marks and Extreme Art Studio Businesses. You must pay one percent (1%) of your Gross Sales for the Brand Fund ("Brand Fund Contribution"). Your contribution to the Brand Fund will be in addition to all other advertising requirements set out in this Item 11. Each franchisee will be required to contribute to the Brand Fund, but certain franchisees may contribute on a different basis, depending on when they signed their Franchise Agreement. Franchisor-owned outlets may, but are not required to, contribute to the Brand Fund on the same basis as franchisees. Extreme Art Studio Businesses will contribute to the same Brand Fund.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 27–37)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, while all franchisees are required to contribute to the Brand Fund, the contribution basis may vary depending on when the Franchise Agreement was signed. Generally, franchisees must pay one percent (1%) of their Gross Sales to the Brand Fund. Franchisor-owned outlets may, but are not required to, contribute to the Brand Fund on the same basis as franchisees. All Extreme Art Studio Businesses contribute to the same Brand Fund.
In addition to the Brand Fund contribution, franchisees are also obligated to spend $500 per month on local advertising for each Extreme Art Studio Business they operate. Failure to meet this local advertising requirement will result in the franchisee being required to pay the difference to Extreme Art Studio or the Brand Fund.
Franchisees may also be required to participate in local or regional advertising cooperatives, contributing 0.5% to 1% of Gross Sales as determined by the members of the cooperative. These contributions to the advertising cooperative can be credited toward the franchisee's local advertising requirement. Extreme Art Studio retains the right to form, change, dissolve, or merge any advertising cooperative in the future.