If Fitstop establishes a regional cooperative that includes my franchise, will I be required to contribute to it?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
We reserve the right to establish regional cooperatives that are comprised of a geographical market area that contains two (2) or more Franchised Businesses (whether a Franchised Business or Affiliate-owned) (each a "Cooperative"). If we assign your Franchised Business to a Cooperative we establish, you must work with the other Franchised Business owners in your Cooperative and us to develop and implement regional advertising campaigns designed to benefit all the Franchised Businesses within the geographical boundaries of the Cooperative. We have not established any Cooperatives as of the Issue Date of this Disclosure Document and have not contemplated how much a Franchised Business might be required to contribute to such a Cooperative. We will have the right to establish, modify, merge and dissolve Cooperative as we deem appropriate. Any amounts you expend on Cooperatives will be credited towards your Local Advertising Requirement.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 24–35)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, if Fitstop assigns your franchise to a regional cooperative, you must collaborate with other franchise owners in the cooperative and Fitstop to create and implement regional advertising campaigns. These campaigns should benefit all franchises within the cooperative's geographical boundaries.
Fitstop reserves the right to establish, modify, merge, and dissolve these cooperatives as they deem appropriate. However, as of the FDD's issue date, Fitstop has not established any cooperatives.
The FDD does not specify the amount a franchisee might be required to contribute to a cooperative, but any amounts spent on cooperative advertising will be credited towards your local advertising requirement. This means that while you may be required to contribute to a cooperative if one is established, that contribution can offset other local advertising obligations.