How did Chem Dry account for advertising expenses in 2021, 2022, and 2023?

According to Chem Dry's 2024 Franchise Disclosure Document, advertising expenses are charged to income during the year they are incurred. For the years ending December 31, 2023, 2022, and 2021, Chem Dry's advertising expenses were $3,027, $3,806, and $2,018, respectively. This means that the company recognizes the cost of advertising in the same period that the advertising activities take place, rather than spreading it out over a longer period.

For a prospective Chem Dry franchisee, this accounting practice provides transparency into the company's marketing investments and how they are reflected in the financial statements each year. Franchisees can see the actual advertising expenses for each of the past three years, which can help them assess the company's commitment to marketing and brand promotion. This information can be useful in evaluating the potential benefits of the brand marketing fund contributions that franchisees are required to make.

It's important to note that while the FDD provides the total advertising expenses, it does not detail how these funds were allocated across different marketing channels or initiatives. Franchisees who want more specific information about the use of advertising funds may want to request the Annual Report from Chem Dry, which includes a summary of expenditures from the Brand Marketing Fund. Additionally, franchisees might consider discussing the marketing strategy and planned advertising activities with existing franchisees or the franchisor to gain a better understanding of how their contributions are being used to support the Chem Dry brand.