What are Marketing Fees for an Extreme Art Studio franchise comprised of?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
If you use marketing materials that we have not approved in accordance with Section 9.2.3, we may charge you a fee of $500 per occurrence.
9.2 LOCAL ADVERTISING.
9.2.1 For each Extreme Art Studio Business you operate, you agree to spend $500 each calendar month to advertise and promote the Franchised Business (which may include the costs of online advertising) ("Local Advertising Requirement"). Upon our request, you agree to send us, in the manner we prescribe, an accounting of your Local Advertising Requirement during the preceding months. If you fail to meet your required Local Advertising Requirement in any month, you must pay us the difference between the amount you spent and the minimum Local Advertising Requirement, which will be contributed to the Brand Fund (as defined in Section 9.3), if established.
9.2.2 You agree, at your sole cost and expense, to issue and offer such rebates, giveaways and other promotions in accordance with advertising programs established by us, and further agree to honor the rebates, giveaways and other promotions issued by other Extreme Art Studio franchisees under any such program, so long as such compliance does not contravene any applicable law, rule or regulation. You will not create or issue any gift cards/certificates, and will only sell gift cards/certificates that have been issued or sponsored by us and which are accepted at all Extreme Art Studio Businesses, and you will not issue coupons or discounts of any type except as approved by us.
9.2.3 Any advertising and promotion conducted by you with respect to the Franchised Business must follow our guidelines. All advertising and promotional materials that you develop for the Franchised Business must contain notices of the domain of our System Website (as defined in Section 9.5 below) in the manner we designate. You agree that your advertising, promotion and marketing will be completely clear, factual, and not misleading and conform to both the highest standards of ethical advertising and marketing and the advertising and marketing policies that we prescribe from time to time. All advertising, promotion and marketing must conform to our System Standards. At least ten days before you intend to use them, you agree to send us for approval samples of all advertising, promotional and marketing materials that we have previously not approved. If we do not approve of the materials within five days of our receipt of such materials, then they shall be deemed disapproved. You may not use any advertising, promotional or marketing materials that we have not approved or have disapproved.
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 spend $500 each calendar month on local advertising to promote their franchised business. This may include online advertising costs. If a franchisee spends less than the required $500 in a given month, they must pay the difference to Extreme Art Studio, which will then contribute the funds to the Brand Fund, if one has been established.
Extreme Art Studio also requires franchisees to issue and offer rebates, giveaways, and other promotions in accordance with the advertising programs that Extreme Art Studio establishes. Franchisees must also honor the rebates, giveaways, and other promotions that other Extreme Art Studio franchisees offer under such programs, as long as compliance does not violate any applicable law, rule, or regulation. Franchisees cannot create or issue any gift cards/certificates and can only sell gift cards/certificates issued or sponsored by Extreme Art Studio that are accepted at all Extreme Art Studio businesses. Additionally, franchisees cannot issue coupons or discounts of any type unless approved by Extreme Art Studio.
Any advertising and promotion conducted by the franchisee must follow Extreme Art Studio's guidelines. All advertising and promotional materials developed by the franchisee must include notices of the domain of Extreme Art Studio's System Website. The franchisee's advertising, promotion, and marketing must be clear, factual, and not misleading, conforming to the highest standards of ethical advertising and marketing and the advertising and marketing policies prescribed by Extreme Art Studio. All advertising, promotion, and marketing must conform to Extreme Art Studio's System Standards. Franchisees must send samples of all advertising, promotional, and marketing materials that Extreme Art Studio has not previously approved for approval at least ten days before they intend to use them. If Extreme Art Studio does not approve the materials within five days of receipt, they are deemed disapproved, and the franchisee cannot use them. If a franchisee uses marketing materials that Extreme Art Studio has not approved, Extreme Art Studio may charge a fee of $500 per occurrence.