What restriction is placed on advertising cooperatives to prevent affiliate-owned Fly Fitness outlets from having controlling voting power?

According to Fly Fitness's 2024 Franchise Disclosure Document, each outlet within an advertising cooperative, whether it's a franchised location or an affiliate-owned one, gets one vote when determining fees or other requirements imposed by the cooperative. To prevent affiliate-owned Fly Fitness outlets from dominating the decision-making process, Fly Fitness does not allow cooperatives to be formed or maintained if the affiliate-owned outlets would have a controlling voting power.

This arrangement ensures that franchisees have a voice in advertising decisions that affect their businesses and prevents the franchisor's corporate-owned locations from unilaterally dictating the terms of the advertising cooperative. This setup is fairly common in franchising, as it aims to balance the interests of both franchisees and the franchisor in marketing and advertising efforts.

For a prospective Fly Fitness franchisee, this means that while you may be required to contribute to a local advertising cooperative, the cooperative must be structured to prevent the franchisor's affiliate-owned locations from having a controlling vote. This provides some assurance that your advertising dollars will be spent in a way that benefits all members of the cooperative, not just the franchisor's interests. Franchisees may be required to contribute up to 70% of their local marketing requirement towards the cooperative.