For what purpose should the Local Advertising Allocation be used by a Floyds 99 franchisee?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
all FLOYD'S 99 Barbershops unless otherwise specified.
ITEM 6. OTHER FEES
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty1 | 6% of Gross Sales | Payable on the day of the week we periodically designate, based on prior week's Gross Sales | Gross Sales include all revenue from the Barbershop, including sales made away from the Barbershop premises. Gross Sales do not include sales taxes and discounts that have been approved by us in advance. Royalties are paid by electronic transfer of funds. |
| National Marketing Contribution1 | Currently 1.5% of Gross Sales, but we can require (upon 90 days' notice to you) up to a maximum of 3.0% of Gross Sales. The combination of the National Marketing Contribution and Local Advertising Allocation will not exceed a total of 4% of Gross Sales. (See Royalty Remarks above for discussion of "Gross Sales") | Payable on the day of the week we periodically designate, based on prior week's Gross Sales | We currently collect a National Marketing Contribution equal to 1.5% of Gross Sales and reserve the right to increase this amount up to 3.0% of Gross Sales on 90 days' prior written notice to you. Contributions are used primarily for production of advertising and marketing for the Barbershops. See Item 11. Our affiliate-owned Barbershops contribute the same as franchisee-owned Barbershops. The National Marketing Contribution is paid by electronic transfer of funds separate from the royalty transfer. Certain franchisees that signed Franchise Agreements prior to the date of this Disclosure Document have a National Marketing Contribution requirement of 1% of Gross Sales. |
| Local Advertising Allocation2 | 1% to 2% of Gross Sales The combination of the National Marketing Contribution and Local Advertising Allocation will not exceed a total of 4% of Gross Sales. | As incurred | The Local Advertising Allocation is in addition to the National Marketing Contribution, but is retained by you to advertise your Barbershop. This is the minimum average you must spend each calendar quarter, with a report of expenditures submitted as part of your required financial reporting to us. Funds spent on local advertising must be focused on the promotion of your Shop to consumers. Funds spent through sites or networks such as Indeed, Craigslist, or other similar sites or professional networks, whether to recruit employees or for other purposes, are not approved as local advertising. |
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, the Local Advertising Allocation, which ranges from 1% to 2% of Gross Sales, must be used to advertise the franchisee's Barbershop. This allocation is in addition to the National Marketing Contribution, but the combined total of both contributions cannot exceed 4% of Gross Sales. The franchisee retains control over this Local Advertising Allocation, but must spend the minimum average amount each calendar quarter and report these expenditures as part of their required financial reporting to Floyds 99.
The funds spent on local advertising must specifically promote the Floyds 99 shop to consumers. The FDD explicitly prohibits using these funds on sites or networks like Indeed or Craigslist for recruitment or other non-advertising purposes. This restriction ensures that the advertising spend is focused on attracting customers to the barbershop rather than for other business-related expenses.
If Floyds 99 establishes a Regional Advertising Co-op that includes a franchisee's Barbershop, the franchisee's Local Advertising Allocation may be reallocated to the co-op. This means that the franchisee would contribute their local advertising funds to a larger, regional marketing effort managed collectively with other franchisees in the area. This co-op structure allows for potentially more impactful regional campaigns, but also means the franchisee would relinquish direct control over how those specific funds are spent, as decisions are made by the majority of the co-op members, subject to Floyds 99's approval.