Does Bombs Away provide franchisees with a financial statement of the Marketing Fund?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
d) procedures for our system.
- F. Marketing Fund. We will administer the Marketing Fund (Section 5.5). We will prepare an unaudited annual financial statement of the Marketing Fund within 120 days of the close of our fiscal year and will provide the financial statement to you upon request. (Section 9.3)
- G. Website. We will maintain a website for the Bombs Away brand, which will include your business information and telephone number. (Section 5.5)
Advertising
Our obligation. We will use the Marketing Fund only for marketing and related purposes and costs. Media coverage is primarily local. We use outside vendors and consultants to produce advertising. We are not required to spend any amount of advertising in the area or territory where any particular franchisee is located. We will maintain the brand website (which may be paid for by the Marketing Fund). We have no other obligation to conduct advertising.
Your own advertising material. You may use your own advertising or marketing material only with our approval.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 18–23)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, Bombs Away will provide franchisees with an unaudited annual financial statement of the Marketing Fund. This statement will be available within 120 days of the close of Bombs Away's fiscal year and will be provided to franchisees upon request. Franchisees are required to contribute 2% of gross sales per month to the Marketing Fund, although Bombs Away retains the right to have other franchisees contribute a different amount or at a different rate. Notably, outlets that Bombs Away owns are not obligated to contribute to the Marketing Fund.
It's important to note that the financial statements provided are unaudited, meaning they have not been verified by an independent accounting firm. This differs from audited statements, which provide a higher level of assurance regarding their accuracy. Bombs Away states that because they are a new franchisor, they did not spend any money from the Marketing Fund in their most recently concluded fiscal year. Any unspent funds in the Marketing Fund will remain in the fund to be spent in the subsequent year.
Prospective franchisees should be aware that the Marketing Fund is used for marketing and related costs, with media coverage being primarily local. Bombs Away uses outside vendors and consultants to produce advertising and is not required to spend any specific amount on advertising in any particular franchisee's area or territory. Franchisees must also spend at least 5% of gross sales each month on local marketing for their business.
Given that the Marketing Fund is unaudited, it would be prudent for prospective Bombs Away franchisees to inquire about the specific procedures and controls Bombs Away has in place to ensure the accuracy and proper use of the funds. Understanding how these funds are managed and allocated can help franchisees assess the value and effectiveness of their contributions to the Marketing Fund.