To whom is the regional advertising fee paid by a Pump It Up franchisee?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) This amount is not paid to us but must be spent by you. We have the right to establish a regional advertising association for an area that includes your Protected Area. In that situation, up to 1% of your Gross Revenue, the exact amount to be determined by the advertising association, must be paid by you to that advertising association. See Item 11.
Source: Item 6 — OTHER FEES (FDD pages 15–21)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, if a regional advertising association is established in the franchisee's area, a Pump It Up franchisee must pay up to 1% of their gross revenue to that advertising association. The exact amount is determined by the advertising association itself. This regional advertising fee is separate from the 2% of gross revenues (or $12,000, whichever is greater) that franchisees must spend annually on local store marketing.
This means that a prospective Pump It Up franchisee needs to be aware of the potential for an additional advertising expense beyond their local marketing obligations. The establishment of a regional advertising association is not guaranteed, but if one is formed, the franchisee will be obligated to contribute. The FDD specifies that this payment is made directly to the advertising association, not to Pump It Up itself.
It is important for potential franchisees to inquire about the likelihood of a regional advertising association being formed in their target area. Understanding the structure and governance of any existing or planned advertising associations is also crucial. Franchisees should also clarify how the advertising association determines the exact percentage of gross revenue to be contributed, ensuring transparency and accountability in the process.