If my Itan store is in a region with an advertising cooperative, what two actions must I take?
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, if your store is in a region subject to an advertising cooperative, you are required to take specific actions. Firstly, you must participate in the cooperative according to its established rules and procedures and abide by its decisions. This means actively engaging in the cooperative's activities and adhering to the guidelines set forth by the group. Secondly, you must pay a cooperative advertising fee, which contributes to the collective advertising efforts of the region.
The advertising fee may be set either by Itan or by a majority vote of the cooperative's members. Regardless of who sets the fee, it will not exceed your Local Marketing Commitment. All cooperative advertising fees you pay are credited against your Local Marketing Commitment, effectively offsetting your individual marketing obligations. This ensures that your contributions to the cooperative are recognized and integrated into your overall marketing strategy.
It's important to note that any company-owned Itan store located within the cooperative will contribute on the same basis as franchisees, ensuring equitable participation across all locations. While 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, providing transparency regarding the cooperative's financial activities. Itan also reserves the right to form, change, merge, or terminate advertising cooperatives at any time, which means the structure and existence of the cooperative can change.