What is the condition for the Fly To Fit Market Cooperative to impose dues?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Market Cooperative Contribution | As determined by co-op. Currently, none. | Monthly, by the 1st Tuesday of the following month | We have the right to establish local or regional advertising cooperatives. The maximum contribution that a co-op may require is 5% of gross sales. Any location owned by us or any affiliate will have the same voting rights as our franchisees. Dues will be imposed by a majority vote and will not be less than 1% of gross sales. If any location owned by us or any affiliates have a majority vote, the maximum fees imposed will not exceed 3% of gross sales. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the Market Cooperative can impose dues if approved by a majority vote. The dues will not be less than 1% of gross sales. The maximum contribution that a co-op may require is 5% of gross sales. If Fly To Fit or any of its affiliates owns a location and has a majority vote, the maximum fees imposed will not exceed 3% of gross sales. These contributions are due monthly, by the 1st Tuesday of the following month. Currently, there are no market cooperative contribution fees.
Fly To Fit retains the right to establish local or regional advertising cooperatives. Any location owned by Fly To Fit or its affiliates will have the same voting rights as franchisees. This means that Fly To Fit could potentially influence or control the imposition and amount of cooperative dues.
For a prospective franchisee, this means that while there are currently no market cooperative fees, they could be implemented in the future. The franchisee's financial planning should account for the possibility of these fees, up to a maximum of 5% of gross sales unless Fly To Fit or its affiliates have a majority vote, in which case the maximum would be 3%. It is important to note that these fees are in addition to the royalty and marketing fund contribution fees already in place, which are 6% and 1% of gross sales, respectively.