How might Itan provide online access to local advertising assets, and what are the franchisee's responsibilities in that case?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
Advertising Cooperative.** We may, but need not, establish regional advertising cooperatives for purposes of creating and/or purchasing advertising programs for the benefit of all Salons located in the region.
We may: (a) determine the boundaries of the cooperative; (b) specify the manner in which the cooperative is organized and governed; (c) require the cooperative to be administered in accordance with written bylaws, organizational documents or other governing documents that we approve; and (d) require you to participate in the cooperative according to its rules and procedures and abide by its decisions.
You must pay a cooperative advertising fee on each royalty fee due date or such other date specified by the cooperative.
We may set the minimum cooperative advertising fee or we may allow the cooperative to set the cooperative advertising fee based on majority vote of its members.
In either case, the fee will not exceed the Local Marketing Commitment.
We may either: (a) collect cooperative advertising fees and remit them to the cooperative; or (b) require you to pay these fees directly to the cooperative.
All cooperative advertising fees you pay are credited towards
your Local Marketing Commitment. We may form, change, merge or dissolve advertising cooperatives in our discretion.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan may establish regional advertising cooperatives to create and purchase advertising programs that benefit all salons in a specific region. Itan has the authority to determine the boundaries of the cooperative, specify its organization and governance, and require the cooperative to be administered according to written bylaws or governing documents approved by Itan.
As a franchisee, you may be required to participate in the cooperative according to its rules and procedures and abide by its decisions. You must pay a cooperative advertising fee on each royalty fee due date or another date specified by the cooperative. 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 fee will not exceed the Local Marketing Commitment, which is the minimum amount you must spend each month on local advertising and marketing to promote your salon.
Itan may either collect cooperative advertising fees and remit them to the cooperative or require you to pay these fees directly to the cooperative. All cooperative advertising fees you pay are credited towards your Local Marketing Commitment. Itan retains the right to form, change, merge, or dissolve advertising cooperatives at its discretion. This structure allows Itan to manage and coordinate advertising efforts across different regions, ensuring brand consistency and potentially leveraging economies of scale in advertising purchases.
Franchisees are responsible for adhering to the cooperative's rules and payment schedules, contributing financially, and participating in decision-making processes if the cooperative structure allows. However, franchisees are also bound by Itan's ultimate control over the cooperative's formation and changes, as well as the overall advertising and marketing strategies.