Will Auntie Annes provide an independent audit of the Ad Fund?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
We are not required to have an independent audit of the Ad Fund completed. We will provide you with an annual summary of the expenditures of the Ad Fund on your reasonable request. If any monies in the Ad Fund remain at the end of a fiscal year, they will carry-over in the Ad Fund into the next fiscal year. We may treat any amounts that we contribute to the Ad Fund in excess of our required contributions for Businesses that we operate and any spending on advertising that we make in excess of the amounts then available in the Ad Fund as a loan from us to the Ad Fund. We have the right to be reimbursed from the Ad Fund any amounts that we loan to the Ad Fund.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes' 2024 Franchise Disclosure Document, Auntie Annes is not required to have an independent audit of its Ad Fund completed. However, Auntie Annes will provide franchisees with an annual summary of the Ad Fund's expenditures upon reasonable request.
This means that as a franchisee, you will not receive a fully audited financial statement of the Ad Fund. Instead, you are entitled to a summary of how the advertising money was spent. While this summary provides some transparency, it does not offer the same level of assurance as an independent audit conducted by a certified public accounting firm.
The FDD also states that Auntie Annes does not need to keep the Ad Fund in a separate account, is not a fiduciary with respect to the fund, and the Ad Fund is not a trust. Any unspent money in the Ad Fund at the end of the fiscal year will carry over into the next fiscal year. Auntie Anne's can also treat any excess contributions or advertising spending as a loan from them to the Ad Fund, which they have the right to be reimbursed for from the Ad Fund.