Can Fly Fitness collect a Fly Fitness franchisee's local advertising expenditure and implement local advertising on the franchisee's behalf?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
ng agencies, the standards and specifications established by Franchisor, as modified from time to time, shall be final and binding upon Franchisee.
13.2. Local Advertising.
- 13.2.1. In addition to the ongoing advertising contributions set forth herein, and following the expenditures set forth in Section 13.2.3 below, Franchisee shall spend monthly, throughout the term of this Agreement, not less Five Hundred Dollars ($500) per month on advertising for the Franchised Business in the Territory ("Local Advertising"). Franchisor reserves the right to increase this minimum expenditure by ten percent (10%) per year in its sole discretion. Franchisor may require Franchisee to allocate to an advertising cooperative, as described in Section 13.4, some or all of Franchisee's required Local Advertising expenditures. Such allocation will be in partial or full satisfaction of Franchisee's obligations pursuant to this Section 13.2.1. Franchisor reserves the right to collect some or all of Franchisee's Local Advertising expenditure and implement Local Advertising on Franchisee's behalf.
- 13.2.2. Within ten (10) business days of Franchisor's request, Franchisee shall provide a quarterly expenditure report accurately reflecting Franchisee's Local Advertising expenditures for the preceding quarterly period. The following costs and expenditures incurred by Franchisee shall not be included in Franchisee's expenditures on Local Advertising for purposes of this Section, unless approved in advance by Franchisor in writing: (i) incentive programs for employees or agents of Franchisee; (ii) research expenditures; (iii) salaries and expenses of any of Franchisee's personnel to attend advertising meetings, workshops or other marketing activities; (iv) charitable, political or other contributions or donations.
- 13.2.3. Franchisee shall spend at least Fifteen Thousand Dollars ($15,000.00) on Local Advertising and promotional activities in the Territory commencing at least thirty (30) days prior to and within the first ninety (90) days after the opening of the Franchised Business to promote the ope
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness has the right to collect a franchisee's local advertising expenditure and implement local advertising on the franchisee's behalf. Specifically, Fly Fitness can collect some or all of a franchisee's local advertising expenditure to implement local advertising on the franchisee's behalf.
Fly Fitness franchisees are required to spend a minimum of $500 per month on local advertising throughout the term of the agreement. Fly Fitness retains the right to increase this minimum expenditure by 10% per year at its discretion. Additionally, franchisees must spend at least $15,000 on local advertising and promotional activities within the period starting 30 days before and ending 90 days after the opening of their Fly Fitness franchise.
This arrangement gives Fly Fitness significant control over how local advertising funds are spent, potentially ensuring brand consistency and coordinated campaigns. However, it also means franchisees may have less direct control over their local advertising strategies. Franchisees are required to provide quarterly expenditure reports detailing their local advertising spending, and certain costs, such as employee incentive programs or research expenditures, are not included unless pre-approved by Fly Fitness. This ensures that advertising funds are used in a manner consistent with Fly Fitness's standards.