Under what conditions will Extreme Art Studio establish a Local Advertising Cooperative?

According to Extreme Art Studio's 2024 Franchise Disclosure Document, Extreme Art Studio, its affiliates, or designees have the option to establish a Local Advertising Cooperative in geographic areas where two or more Extreme Art Studio businesses are operating. If a Local Advertising Cooperative exceeds five franchisee members, Extreme Art Studio will require it to be organized and governed by written documents available for review by participating franchise owners. Extreme Art Studio retains the right to change, dissolve, and merge these cooperatives.

The purpose of each Local Advertising Cooperative is to administer advertising programs and develop advertising, marketing, and promotional materials for its designated area, subject to Extreme Art Studio's approval. If a cooperative is established in the franchisee's geographic area, the franchisee must sign the required documents to become a member and participate in the cooperative.

Franchisees are required to contribute their share to the Local Advertising Cooperative, as determined by its members, for each Extreme Art Studio Business they own within the cooperative's area. These contributions are credited towards the franchisee's Local Advertising Requirement, which is $500 per month, and are payable within five days after the end of the calendar month. The bylaws adopted by the Local Advertising Cooperative, subject to Extreme Art Studio's approval, may cap these contributions. Extreme Art Studio collects these funds electronically and remits them to the Local Advertising Cooperative periodically. Extreme Art Studio businesses owned by Extreme Art Studio or its affiliates contribute on the same basis as franchisees. Each contributing Extreme Art Studio Business has one vote on cooperative matters, but all advertising, marketing, and promotional plans or materials require Extreme Art Studio's prior written consent.

Prospective franchisees should note that participation in a Local Advertising Cooperative is mandatory if one is established in their area. While the cooperative aims to benefit all members, there is no guarantee that a franchisee's business will directly or proportionally benefit from the advertising and marketing efforts relative to their contribution. Franchisees should inquire about the specific criteria and process Extreme Art Studio uses to determine the geographic areas for establishing Local Advertising Cooperatives to better understand if and when they might be required to participate.