Is the Bombs Away Marketing Fund audited?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
Advertising Fund. You and all other franchisees must contribute to our Marketing Fund. Your contribution is 2% of gross sales per month. We reserve the right to have other franchisees contribute a different amount or at a different rate. Outlets that we own are not obligated to contribute to the Marketing Fund. We administer the fund. The fund is not audited. We will make unaudited annual financial statements available to you upon request.
Because we are a new franchisor, we did not spend any money from the Marketing Fund in our most recently concluded fiscal year.
If less than all marketing funds are spent in the fiscal year in which they accrue, the money will remain in the Marketing Fund to be spent in the next year.
No money from the Marketing Fund is spent principally to solicit new franchise sales.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 18–23)
What This Means (2024 FDD)
According to the 2024 Bombs Away Franchise Disclosure Document, the Marketing Fund is not audited. Bombs Away franchisees are required to contribute 2% of gross sales per month to the Marketing Fund, though the franchisor retains the right to have other franchisees contribute a different amount or at a different rate. Notably, Bombs Away-owned outlets are not obligated to contribute to the Marketing Fund.
Bombs Away will administer the fund and make unaudited annual financial statements available to franchisees upon request. Because Bombs Away is a new franchisor, no money was spent from the Marketing Fund in the most recently concluded fiscal year. If the entire marketing fund is not spent during a fiscal year, the remaining funds will be carried over to the next year.
It is typical in the franchise industry for marketing funds to be audited, providing franchisees with greater transparency and assurance that the funds are being managed responsibly. The lack of an audit for the Bombs Away Marketing Fund may be a point of concern for prospective franchisees, as it means there is no independent verification of the fund's financial statements. Franchisees may want to inquire about the franchisor's plans for future audits as the system grows.