What is the maximum monthly Cooperative Contribution for a Punch King Fitness franchisee?
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, franchisees may be required to participate in a local or regional advertising cooperative if their territory falls within the designated boundaries. The amount of the Cooperative Contribution is determined by the members of the Cooperative, but it cannot exceed $100 per month.
This means that as a Punch King Fitness franchisee, you could be obligated to contribute up to $100 monthly towards local or regional advertising efforts. These cooperatives are designed to enhance marketing and advertising within specific geographic areas, with the aim of benefiting all participating franchisees.
The FDD specifies that Punch King Fitness itself will contribute to the Cooperative on the same basis as its franchisees for any company-owned locations within the cooperative's area. The cooperative is required to prepare monthly financial statements, which are available to members upon request, providing transparency in how the funds are managed and spent. Franchisees do not have the right to form, change, dissolve, or merge any Regional Advertising Cooperative.
It's important to note that while participation in a Cooperative may be mandatory, the maximum contribution is capped at $100 per month. This contribution is separate from the 2% of Gross Revenues that franchisees must contribute to the Punch King Fitness National Advertising Fund.