What happens if Body20 does not elect to have an independent audit of the Brand Fund?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
We have established and administer a Brand Fund to which you must contribute up to 4% (currently, 2%) of Gross Sales. Under no circumstances will we be deemed a fiduciary with respect to any Brand Fund Fees we receive or administer. We are not required to have an independent audit of the Brand Fund completed, but, if we elect to do so, we may use Brand Fund monies to pay for the audit. We will prepare an unaudited statement of contributions and expenditures for the Brand Fund and make it available within 60 days after the close of our fiscal year to franchisees who make a written request for a copy.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 38–49)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, Body20 is not required to have an independent audit of the Brand Fund completed. If Body20 chooses not to conduct an independent audit, there are still some requirements regarding the Brand Fund.
Specifically, Body20 will prepare an unaudited statement of contributions and expenditures for the Brand Fund. This statement will be made available to franchisees within 60 days after the close of Body20's fiscal year. However, this statement is only provided to franchisees who make a written request for a copy.
This means that franchisees are responsible for taking the initiative to request this financial information if they want to review it. While an independent audit provides a higher level of assurance, the unaudited statement still offers some transparency into how the Brand Fund is being managed. Franchisees should be aware that the Brand Fund contributions are up to 4% of gross sales, but are currently 2%.