Who administers the Regional Advertising Cooperative for Punch King Fitness?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
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Regional and Local Advertising Cooperatives.
We may designate any geographical area where at least two Punch King Fitness Franchised Businesses are located to establish a local or regional marketing and advertising cooperative (Cooperative). Each Cooperative will be organized and governed in a manner approved by us in writing. If your Territory is within the geographic boundaries of a Region or Local Cooperate that we designate, you will be required to participate in the cooperative. The members of the Cooperative will determine the amount of the Cooperative Contribution, but the Cooperative Contribution may not exceed $100 per month. Within thirty days after the end of each calendar month, each Cooperative will prepare an unaudited statement of the Cooperative's financial position and the results of operations of the Cooperative. Each member of the Cooperative will be entitled to receive a copy of the Cooperative's financial statements upon request. For each Punch King Fitness business operated by us or our affiliates in a geographical area for which a Cooperative has been established, we will make a Cooperative Contribution on the same basis as assessments required of comparable franchises that are members of the same Cooperative. If outlets owned by us have the controlling voting power, Cooperative Contribution will not exceed $100 per month. You do not have the right to form, change, dissolve, or merge any Regional Advertising Cooperative. We shall administer the Regional Advertising Cooperative. There are currently no Regional Advertising Cooperativ
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 28–35)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, the franchisor administers the Regional Advertising Cooperative. The document also states that there are currently no Regional Advertising Cooperatives or governing documents available for review.
If a franchisee's territory falls within a designated Regional or Local Cooperative, participation is mandatory. The cooperative members determine the contribution amount, but it cannot exceed $100 per month. Each cooperative must prepare an unaudited statement of its financial position and operations monthly, providing copies to members upon request.
For any Punch King Fitness businesses operated by the franchisor or its affiliates within a cooperative's area, the franchisor will contribute on the same basis as comparable franchises. However, if franchisor-owned outlets have controlling voting power, the Cooperative Contribution will not exceed $100 per month. Franchisees do not have the right to form, change, dissolve, or merge any Regional Advertising Cooperative.
This structure gives Punch King Fitness significant control over regional advertising efforts, while also requiring franchisee participation and contributions if a cooperative is established in their area. The absence of existing cooperatives and governing documents suggests that this is a developing aspect of the franchise system.