What is the Fitstop franchisee's obligation regarding payments for marketing/advertising and/or promotional expenditures?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
or campaigns for all franchises in the network including the Franchise. You must comply with the terms of and actively participate in all sales, marketing, or promotional
campaigns, programs or activities conducted, or reasonably required, by us. You will have access to marketing, promotional, and presentation material including template emails, scripts, presentation packs via the online system and Manual(s). You shall fully cooperate with us in connection with, and participate in, all of our market research programs. We will pay the costs of such campaigns, programs, and activities using the Marketing Fees paid by you and other franchisees but we reserve the right to request additional payments from you and other franchisees upon reasonable demand.
6.2 Use of Prescribed Materials. You must display on or about the premises only those signs, posters, and other advertising material we approve. You must maintain all signs, posters and other advertising material in a clean and satisfactory condition and good state of repair. Without prejudice to any other remedy available, we may, through our employees and agents, remove from the premises any printed matter, signs, posters, or other advertising material which we have not approved or which is not in a clean or satisfactory condition and state of repair.
6.3 Initial Marketing Spend; Other Initial Marketing/Promotional Efforts.
- 6.3.1 Initial Marketing Spend. You are required to spend a minimum of $10,000 in various online and/or other marketing activities that we prescribe as part of our System and that we expect will be paid to our Approved Supplier (the "Initial Marketing Spend"). Typically, we expect that you will be required to expend these amounts 30 to 90 days prior to opening and continuing through the grand opening of your Franchised Business – as we discuss and specify prior to any opening or operation of your Franchised Business in the Manual(s) or otherwise in writing. We may require that you expend any portion of the Initial Marketing Spend on materials/services that are purchased from our Approved Supplier(s).
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, franchisees are obligated to participate in marketing and promotional activities and may be required to make several payments related to marketing and advertising. Fitstop may develop general marketing campaigns for all franchises, and franchisees must comply with and actively participate in these campaigns. While Fitstop covers the costs of these campaigns using Marketing Fees paid by franchisees, they reserve the right to request additional payments from franchisees.
Fitstop franchisees must contribute to a brand development fund, which is equal to two percent (2%) of the Gross Revenue generated by the Franchised Business. This contribution is billed and collected in the same manner as the recurring Royalty Fee. Fitstop has the discretion to use this fund for activities that promote, market, advertise, and develop the Fitstop system, Proprietary Marks, System Business locations, Approved Services/Products, and the brand generally. It is important to note that Fitstop is not required to spend any specific portion of the fund or the franchisee's contributions specifically on marketing or services allocated to the franchisee's Designated Territory.
In addition to the brand development fund, Fitstop franchisees may also be required to make other payments. Franchisees must ensure timely payments from their Designated EFT Account to cover the Local Marketing Requirement and other marketing, advertising, and promotional expenditures, to the extent these amounts are payable to Fitstop or its Approved Suppliers. This means franchisees need to budget for these potential marketing costs and ensure their EFT account has sufficient funds to cover them. Fitstop also provides ongoing consultation to franchisees on advertising and promotion, offering continuing assistance through scheduled meetings with business performance coaches.