Who determines the cooperative advertising fee for Itan franchises, and what are the possible methods?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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, the cooperative advertising fee is determined either by Itan itself or by a majority vote of the members within the cooperative. The document states that Itan may set the minimum cooperative advertising fee, or it may allow the cooperative to set the fee based on a majority vote of its members.
Regardless of who sets the fee, the cooperative advertising fee will not exceed the franchisee's Local Marketing Commitment. All cooperative advertising fees paid by the franchisee are credited against their Local Marketing Commitment, which provides a direct offset and ensures that franchisees are not overspending on marketing efforts. Company-owned stores within the cooperative contribute on the same basis as franchisees, ensuring equitable participation in advertising efforts.
Itan reserves the right to form, change, merge, or terminate advertising cooperatives at any time. As of December 31, 2024, there were no advertising cooperatives in effect. 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 abide by its decisions.