Will the 360 Painting Marketing Fund be audited?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
All monies paid into the Marketing Fund will be accounted for separately from our general operating revenues. We anticipate that all contributions to the Marketing Fund will be expended during the Marketing Fund's fiscal year in which they are received. The Marketing Fund is not a trust, and we assume no fiduciary duty in administering the Marketing Fund. Marketing Fund surpluses, if any, may be expended in the following fiscal year(s). We may advance money to the Marketing Fund from time to time. In this event, we may be reimbursed by the Marketing Fund for the monies advanced, including a reasonable interest rate. The Marketing Fund will not be audited, but at your request you may receive an annual report of expenditures and advertising contributions for the fiscal year most recently ended.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–38)
What This Means (2025 FDD)
According to the 2025 360 Painting Franchise Disclosure Document, the Marketing Fund will not be audited. However, 360 Painting states that a franchisee may request an annual report of expenditures and advertising contributions for the most recently ended fiscal year.
360 Painting emphasizes that the Marketing Fund is not a trust and that they do not assume any fiduciary duty in administering it. Any surpluses in the Marketing Fund may be used in subsequent fiscal years. 360 Painting may also advance money to the Marketing Fund and be reimbursed by the fund, including a reasonable interest rate.
This arrangement is fairly typical in franchising. While a full audit provides a high level of scrutiny, an annual report can still offer transparency into how the funds are being managed and spent. A prospective 360 Painting franchisee should consider the implications of the fund not being audited and whether the annual report provides sufficient oversight.