Are company-owned Itan stores required to contribute to advertising cooperatives, and if so, on what basis?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
tten bylaws, organizational documents or other governing documents that we approve.
If your Store is located within a region subject to an advertising cooperative you must: (a) participate in the cooperative according to its rules and procedures and abide by its decisions; and (b) pay a cooperative advertising fee. We may set the minimum cooperative advertising fee or we may allow the cooperative to set the fee based on majority vote of its members. In either case, the cooperative advertising fee will not exceed the amount of your Local Marketing Commitment. All cooperative advertising fees you pay are credited against your Local Marketing Commitment. Any company-owned Store located in the cooperative will contribute on the same basis as franchisees.
Advertising cooperatives are not required to prepare annual or periodic financial statements. Any financial statements that are prepared will be made available to you upon request. We reserve the right to form, change, merge or terminate advertising cooperatives at any time. There were no advertising cooperatives in effect as of December 31, 2024.
Brand and System Development Fund
We administer the Brand Fund to promote public awareness of our brand and improve our System.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 22–31)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, company-owned stores are required to contribute to advertising cooperatives on the same basis as franchisees. If a franchisee's store is located within a region subject to an advertising cooperative, they must participate in the cooperative according to its rules and procedures and pay a cooperative advertising fee.
The franchisor, Itan, may set the minimum cooperative advertising fee or allow the cooperative to set the fee based on a majority vote of its members. However, the cooperative advertising fee will not exceed the amount of the franchisee's Local Marketing Commitment. All cooperative advertising fees paid are credited against the Local Marketing Commitment.
Itan may establish regional advertising cooperatives for pooling advertising funds to be used in specific regions, with boundaries coinciding with zip codes, designated marketing areas, or municipal boundaries. Itan will determine how the cooperative is organized and governed, choosing between administering the cooperative themselves or establishing an advertising council comprised of the cooperative's members.