Does Extreme Art Studio have a regional advertising cooperative?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
You may be required to participate in any established local or regional advertising cooperative for Extreme Art Businesses. The area of each local and regional advertising cooperative will be defined by us, based on our assessment of the area. Franchisees in each cooperative will contribute an amount to the cooperative of 0.5% to 1% of Gross Sales as determined by its members for each Extreme Art Studio Business that the franchisee owns that exists within the cooperative's area. Your contributions to a local and regional advertising cooperative will be credited to your Local Advertising Requirement. Each Extreme Art Studio Business we own that exists within the cooperative's area will contribute to the cooperative on the same basis as franchisees. Members of the cooperative will be responsible for administering the cooperative, including determining the amount of contributions from each member. We may require that each cooperative that exceeds five franchisee members must operate with governing documents. Each cooperative must prepare annual unaudited financial statements, and the statements will be provided for review to each member of such cooperative. We reserve the right to form, change, dissolve, or merge any advertising cooperative formed in the future. If we elect to form any cooperatives, or if any cooperative(s) already exist near your territory, you will be required to participate in compliance with the provisions of the Franchise Operations Manual, which we may periodically modify in our discretion.
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, franchisees may be required to participate in local or regional advertising cooperatives. The area covered by each cooperative will be determined by Extreme Art Studio. Franchisees within a cooperative will contribute 0.5% to 1% of their gross sales, as decided by the members, for each Extreme Art Studio Business they own within the cooperative's area. These contributions will be credited towards the franchisee's Local Advertising Requirement.
Extreme Art Studio-owned businesses within the cooperative's area will contribute on the same basis as franchisees. The members of the cooperative are responsible for administering it, including determining contribution amounts. Cooperatives with more than five members may be required to operate with governing documents and must prepare annual unaudited financial statements for member review.
Extreme Art Studio reserves the right to form, change, dissolve, or merge advertising cooperatives in the future. If cooperatives exist near a franchisee's territory or are formed, participation is mandatory, following the guidelines in the Franchise Operations Manual. This manual may be modified periodically at Extreme Art Studio's discretion.