Who bears the expense if Alloy chooses to have the Brand Development Fund audited?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Any sums paid to the Fund that are not spent in the year they are collected will be carried over to the following year. We will prepare, and furnish to you upon written request, an annual statement of funds collected and costs incurred. We are not required to have the Fund statement audited, but if we choose to have the Fund audited it will be at the Fund's expense.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 31–42)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if Alloy chooses to have the Brand Development Fund audited, the expense will be borne by the Brand Development Fund itself. This means that the money used to pay for the audit will come from the pool of funds contributed by Alloy franchisees through their Brand Development Fees.
This arrangement is important for prospective franchisees to understand because it directly affects how the Brand Development Fees are used. While franchisees contribute a percentage of their gross sales (2%) to the Brand Development Fund, the fund is also responsible for covering its own audit expenses should Alloy decide to conduct one.
This could potentially reduce the amount of money available for marketing, promotion, and brand development programs, as these are the intended uses of the Brand Development Fund. However, it also ensures transparency and accountability in the management of the fund, as an audit can verify that the funds are being used appropriately. Franchisees should consider this when evaluating the overall value and management of the Brand Development Fund.