Under what circumstances might a Floyds 99 franchisee's Local Advertising Allocation be reallocated?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
We may, upon 30 days written notice to you, create a regional advertising association ("Co-op") in the market area where you are located, at which time you must become a member of the Co-op. In our sole discretion, we may require that up to 2% of your Gross Sales that you
would normally spend as your Local Advertising Allocation be contributed instead into the Co-op. Other FLOYD'S 99 Shops in your region will be required to contribute on the same basis. If a Co-op is formed in your region, we anticipate that the typical contribution you must make to the Co-op will be up to 2% of your Gross Sales, contributed on a weekly basis or other recurring basis as the Co-op may determine, with our prior approval. If you are contractually bound by your lease or mall regulations to expend a required amount on advertising, the Co-op must factor this in when considering your dues and assessments to be paid to the Co-op. If we form a Co-op, you will be bound by the decisions of the majority of the members of the Co-op regarding expenditures, assessments and dues, to the extent we approve them. If you fail to participate in the Co-op or pay any Co-op dues, you breach the Franchise Agreement.
We must approve all advertising materials before they are used by a Co-op or furnished to its members. Each Co-op must prepare unaudited annual financial statements and send them to you if you request them. We have the right to determine the scope of the geographical areas included in each Co-op. We can form, change and dissolve the Co-op. Each Co-op will operate under a written document which franchisees can view.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 31–38)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, a franchisee's Local Advertising Allocation may be reallocated if Floyds 99 creates a regional advertising association, also known as a Co-op, in the franchisee's market area. Upon 30 days written notice, the franchisee must become a member of the Co-op.
If a Co-op is formed, Floyds 99 may require that up to 2% of the franchisee's Gross Sales, which would normally be spent on their Local Advertising Allocation, be contributed to the Co-op instead. Other Floyds 99 shops in the region will be required to contribute on the same basis. The typical contribution to the Co-op is anticipated to be up to 2% of Gross Sales, contributed on a weekly or other recurring basis as determined by the Co-op, with Floyds 99's prior approval.
If a franchisee is contractually bound by their lease or mall regulations to spend a required amount on advertising, the Co-op must factor this into the franchisee's dues and assessments. Franchisees are bound by the decisions of the majority of the Co-op members regarding expenditures, assessments, and dues, to the extent that Floyds 99 approves them. Failure to participate in the Co-op or pay Co-op dues constitutes a breach of the Franchise Agreement.
Floyds 99 must approve all advertising materials before they are used by a Co-op or furnished to its members. Each Co-op must prepare unaudited annual financial statements and send them to franchisees upon request. Floyds 99 has the right to determine the scope of the geographical areas included in each Co-op and can form, change, and dissolve the Co-op. Each Co-op will operate under a written document which franchisees can view.