Is Body20 required to have an independent audit of the Brand Fund completed?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
Brand Fund. 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. If any monies in the Brand Fund remain at the end of a fiscal year, they will carry-over in the Brand Fund into the next fiscal year. We or one of our affiliates may make or otherwise arrange loans to the Brand Fund in any year in which the balance of the Brand Fund is negative and charge a reasonable rate of interest. The amounts loaned to the Brand Fund will be repaid from future contributions to the Brand Fund in the year the loan is made or in subsequent years.
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 its Brand Fund. However, if Body20 elects to conduct an audit, it may use the Brand Fund monies to cover the expenses.
Body20 will prepare an unaudited statement of contributions and expenditures for the Brand Fund. This statement will be available to franchisees who submit a written request within 60 days after the close of Body20's fiscal year. Any remaining funds in the Brand Fund at the end of the fiscal year will be carried over into the next fiscal year.
Body20 or its affiliates have the option to provide loans to the Brand Fund if the balance is negative, and they can charge a reasonable interest rate. These loans will be repaid from future contributions to the Brand Fund, either in the year the loan is made or in subsequent years. This arrangement provides Body20 with flexibility in managing the Brand Fund, but franchisees should be aware that the fund's financial oversight is limited to an unaudited statement unless Body20 chooses to conduct an independent audit.