Is Beauty Bungalows required to hold contributions to the Brand Fund in a separate bank account?

According to Beauty Bungalows' 2025 Franchise Disclosure Document, Beauty Bungalows is not required to hold contributions to the Brand Fund in a separate bank account. The FDD states that Beauty Bungalows "may, but are not required to, hold contributions to the Fund in a separate bank account." This means that Beauty Bungalows has the discretion to decide whether or not to keep these funds separate.

This flexibility allows Beauty Bungalows to manage the Brand Fund in a way they deem most efficient. However, it also means that franchisee contributions could be co-mingled with other company funds, which might be perceived as a risk by some franchisees. While Beauty Bungalows has no fiduciary duty to franchisees regarding the fund, they do provide an unaudited annual financial statement of the Fund within 120 days of the close of their fiscal year, available upon written request.

Prospective franchisees should be aware that Beauty Bungalows has the right to use the Brand Fund contributions at their discretion, and there is no guarantee that expenditures will directly benefit any particular franchisee or be proportionate to their contributions. Franchisees should consider this when evaluating the potential benefits of the Brand Fund and the overall value of the Beauty Bungalows franchise opportunity.