How do Extreme Art Studio franchisees pay their contributions to the Local Advertising Cooperative?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
e establish a Local Advertising Cooperative in that area during this Franchise Agreement's term, you agree to sign the documents we require to become a member of the Local Advertising Cooperative and to participate in the Local Advertising Cooperative as those documents require.
- 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.
- 9.4.3 Each Extreme Art Studio Business contributing to a Local Advertising Cooperative will have one vote on matters involving the activities of the particular Local
Advertising Cooperative. The Local Advertising Cooperative may not use any advertising, marketing, or promotional plans or materials without our prior written consent. We agree to assist in the formulation of marketing plans and programs which will be implemented under the direction of the Local Advertising Cooperative. You acknowledge and agree that, subject to our approval and subject to availability of funds, the Local Advertising Cooperative will have discretion over the creative concepts, materials and endorsements used by it. You agree that the Local Advertising Cooperative assessments may be used to pay the costs of preparing and producing video, audio and written advertising and direct sales materials for Extreme Art Studio Businesses in your area; purchasing direct mail and other media advertising for Extreme Art Studio Businesses in your area; implementing direct sales programs; and employing marketing, advertising and public relations firms to assist with the development and administration of marketing programs for Extreme Art Studio Businesses in your area.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, franchisees are required to contribute to the Local Advertising Cooperative if one is established in their area. The amount of the contribution is determined by the members of the Local Advertising Cooperative. These contributions count toward the franchisee's Local Advertising Requirement, which is described in Section 9.2 of the agreement. Franchisees must pay their share within five days after the end of each calendar month, or according to Extreme Art Studio's designated schedule. Payments are made electronically to Extreme Art Studio, who then remits the funds periodically to the Local Advertising Cooperative.
Extreme Art Studio also contributes to the Local Advertising Cooperative on the same basis as its franchisees when it owns or operates businesses within the cooperative's area. The cooperative members are responsible for managing the cooperative, including setting the contribution amounts for each member. Each Extreme Art Studio Business contributing to a Local Advertising Cooperative has one vote on matters concerning the cooperative's activities.
Extreme Art Studio specifies that the funds collected for the Local Advertising Cooperative are accounted for separately from Extreme Art Studio's other funds and cannot be used for Extreme Art Studio's general operating expenses. Franchisees are required to submit any reports requested by Extreme Art Studio or the Local Advertising Cooperative. The cooperative must also prepare annual unaudited financial statements, which are available for review by each member of the cooperative.
It is important to note that Extreme Art Studio indicates that a franchisee's business might not directly or proportionally benefit from the advertising and marketing efforts of the Local Advertising Cooperative relative to their contribution. Extreme Art Studio retains the right, but not the obligation, to use collection agents and legal proceedings to collect amounts owed to the Local Advertising Cooperative and may also forgive, waive, settle, and compromise claims by or against the Local Advertising Cooperative.