Legal Question in Business Law in Ohio

i am franchisee and in my franchise agreement says i have to pay 4 1/2 % advertiment fee. so, need advice on the wording for this agreement.

"FRANCHISEE SHALL SPEND ON LOCAL ADVERTISING NOT LESS THAN THE MINIMUM PERCENTAG OF MONTHLY GRESS SALES AS IS PRESCRIBED BY FRANCHISOR; PRIVIDED, HOWEVER, THAT SUCH MINIMUM PERCENTAGE SHALL BE REDUCED BY ANY CONTRINUTION TO A REGIONAL ADVERTISING COOPERATIVE MADE BY FRANCHISEE PERSUAANT OT SECTION X.E. HEREOF THE MINIMUM PERCENTAGE OF MONTHLY GROSS SALES TO BE SPENT BY FRANCHISEE ON LOCAL ADVERTISING SHALL BE FOUR AND ONE-HALF PERCENT(4 1/2%) DURING THE FIRST FULL TWELVE MONTHSA OF OPERATION OF THE RESTAURANT, "

in this paragraph from my understanding it say i have to pay 4 1/2 only first 12-month and not to pay any thing after 12 month.. i need advice on this ... do i have to pay 4 1/2 or any thing?

i thank you in advance.....


Asked on 1/03/10, 10:38 pm

3 Answers from Attorneys
Bradley Miller Miller Law LLC

To be able to answer your question, I would need to see the actual franchise agreement. Besides being able to look at the exact language, I need to see the rest of the agreement in case it contains other provisions that might affect this one. So unfortunately I can't answer your question just based on what you have provided.

If you would like to discuss your situation in more detail, including reviewing the agreement, feel free to contact me.

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Answered on 1/09/10, 1:36 pm
Vaseem Hadi Rendigs, Fry, Kiely & Dennis LLP

I would like to review all docs re the relationship between you and the franchise. My firm specializes in helping small business owners. Pelase call me at your earliest convenience.

Vaseem S. Hadi

513-381-9216

www.rendigs.com

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Answered on 1/10/10, 12:56 pm
Kevin B. Murphy Franchise Foundations, APC

It seems like you have to pay the 4.5% as possibly reduced by any regional co-op advertising you pay into. As the language you quoted refers to other sections of the contract, the entire contract needs to be considered. In addition, the language of the contract should be compared to what was disclosed in the franchise company's FDD Franchise Disclosure Document regarding advertising. You need to consult with a franchise attorney (not just a business attorney) as soon as possible.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

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Answered on 1/14/10, 10:13 am


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