Can Fly To Fit require a franchisee to pay an indeterminate amount for advertising campaigns?

According to the 2024 Fly To Fit FDD, a rider to the franchise agreement in North Dakota addresses advertising expenses. Specifically, Fly To Fit cannot require franchisees to participate in advertising or promotional campaigns where the expense is indeterminate, determined by a third party, or determined by a formula, unless the franchise agreement specifies the maximum percentage of gross monthly sales or the maximum absolute sum that the franchisee may be required to pay. This protects franchisees from potentially uncapped or unpredictable advertising costs.

This provision ensures that Fly To Fit franchisees in North Dakota have clear limits on their financial obligations for advertising. Without such a limit, franchisees could face unexpected and potentially unsustainable expenses for advertising campaigns. The rider ensures transparency and predictability in advertising costs, allowing franchisees to budget and manage their finances more effectively.

For prospective Fly To Fit franchisees in North Dakota, this rider offers a significant safeguard. It means that the franchise agreement must clearly define the maximum amount or percentage of sales that can be allocated to advertising, preventing the franchisor from imposing open-ended or arbitrarily determined advertising fees. This allows franchisees to assess the affordability and potential return on investment of advertising requirements before committing to the franchise.

It is important to note that this protection applies specifically to franchisees operating in North Dakota due to the inclusion of the North Dakota Rider. Franchisees in other states may not have the same level of protection regarding advertising expenses, so they should carefully review their franchise agreements and any applicable state laws.