If I expend money on a Fitstop regional cooperative, how does that affect my local advertising requirement?
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 your Franchised Business is assigned to a regional cooperative, any amounts you spend on these cooperatives will be credited toward your Local Advertising Requirement. Fitstop reserves the right to establish these cooperatives, which consist of a geographical market area containing two or more Franchised Businesses. Franchisees must collaborate with other business owners in the Cooperative and Fitstop to develop and implement regional advertising campaigns.
As of the FDD's issue date, Fitstop has not established any Cooperatives and has not determined how much a Franchised Business might be required to contribute. Fitstop retains the right to establish, modify, merge, and dissolve Cooperatives as it deems appropriate.
This means that while you are required to spend a percentage of your monthly Gross Revenue on local marketing, participation in a regional advertising cooperative could offset some or all of that expense. However, since these cooperatives do not yet exist, prospective franchisees should inquire with Fitstop about typical contribution amounts and how these cooperatives will be managed to effectively plan their local marketing strategies and budgets.