Is the Buff City Soap Brand Fund separately audited?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
We may spend on behalf of the Brand Fund, in any fiscal year, an amount that is greater or less than the aggregate contribution of all BCS Makeries to the Brand Fund in that year, and the Brand Fund may borrow from us or others to cover deficits or may invest any surplus for future use. Any monies in the Brand Fund not spent at the end of each fiscal year will remain in the Brand Fund, provided that amounts contributed to the Brand Fund may be used to pay taxes associated with unspent amounts on deposit in the Brand Fund. We will have the sole and exclusive discretion to direct all activities and programs funded by the Brand Fund. The Brand Fund will not be separately audited. We will, upon your written request (but not more than once annually), provide a copy of our unaudited annual statement of monies collected and costs incurred by the Brand Fund. We have no obligation to ensure that Brand Fund expenditures in or affecting any geographic area are proportionate or equivalent to the Brand Fund Contributions made by franchised BCS Makeries in that geographic area, nor are we obligated to ensure that your Makery or any other BCS Makery will benefit directly or in proportion to your or its Brand Fund contribution, or that all BCS Makeries operated by us or any of our affiliates will pay the same Brand Fund Contribution. As of the issuance date of this disclosure document, the BCS Makeries operated by us and/or our affiliates do not contribute to the Brand Fund. We may terminate and reinstate the Brand Fund at any time. If the Brand Fund is terminated, all unspent monies will be distributed to franchisees operating a BCS Makery in proportion to their respective contributions to the Brand Fund accrued during the preceding three-month period. (Franchise Agreement Section 10(a)).
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 35–42)
What This Means (2025 FDD)
According to the 2025 FDD, the Buff City Soap Brand Fund will not be separately audited. However, upon written request, but not more than once annually, Buff City Soap will provide a copy of their unaudited annual statement of monies collected and costs incurred by the Brand Fund.
This means that while a third-party audit isn't performed to verify the Brand Fund's financial records, franchisees have the right to request an unaudited statement. This statement should provide some transparency into how the Brand Fund is being managed and spent. It is important to note that the statement is unaudited, so the figures have not been independently verified.
For the fiscal year ended December 31, 2024, franchisees contributed a total of $2,696,326 to the Brand Fund. A prospective Buff City Soap franchisee should consider the implications of contributing 2% of net sales to a fund that is not independently audited and factor that into their decision.