factual

If Fly To Fit delegates responsibility for administration of the advertising cooperative to the franchisee members, how will that be determined?

Fly_To_Fit Franchise · 2024 FDD

Answer from 2024 FDD Document

Local or Regional Advertising Cooperatives. We do not currently have any local or regional advertising cooperatives. We have the right to require you to participate in a local or regional advertising cooperative. We will define the area of the cooperative based on media markets, or other geographic criteria that we deem appropriate. Each franchisee in the area would have one vote per outlet (unless the franchisee is in default under its franchise agreement). The amount you must contribute to the cooperative will be determined by vote of the members, but not less than 1% and not more than 5% of gross sales. If our own outlets are members of a cooperative, they must contribute to the cooperative on the same basis as franchisees, and they will vote on the same basis as other members. We administer the cooperative, but we have the right to delegate responsibility for administration to an outside company such as an advertising agency or accounting firm, or to the franchisee members of the cooperative. We have the right to require the cooperative to operate from written bylaws or other governing documents that we determine. The documents are not currently available for you to review. Cooperatives will prepare annual financial statements which will be made available for review only by us and by the members of cooperative. We have the power to require cooperatives to be formed, changed, dissolved, or merged.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 23–30)

What This Means (2024 FDD)

According to Fly To Fit's 2024 Franchise Disclosure Document, the determination of advertising cooperative administration is subject to certain conditions. Fly To Fit retains the right to delegate the administration of the cooperative to an outside company, such as an advertising agency or accounting firm, or to the franchisee members themselves.

Each franchisee within the cooperative's defined area has one vote per outlet, unless they are in default of their franchise agreement. The amount each franchisee contributes to the cooperative is determined by a vote of the members, with contributions ranging from 1% to 5% of gross sales. If Fly To Fit's own outlets are part of the cooperative, they must contribute and vote on the same basis as the franchisees.

Fly To Fit also has the power to require the cooperative to operate under written bylaws or other governing documents that they determine. These documents are not currently available for review. The cooperative must prepare annual financial statements, which are accessible for review by Fly To Fit and the cooperative members. Fly To Fit retains the authority to form, change, dissolve, or merge cooperatives.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.