Is the Chem Dry Brand Marketing Fund (BMF) separately audited?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
The Brand Marketing Fund Committee, an advisory board composed of six (6) franchisees and two members of the CDI corporate staff, advise CDI on the BMF. Franchisee members of the Brand Marketing Fund Committee are appointed by CDI and generally serve a one-year term with an option to extend up to four years. The BMF will not be separately audited. We have no obligation to expend BMF amounts for your benefit equivalent or proportionate to your BMF Contribution, and we do not warrant or guaranty that any franchisee will receive or derive any benefit from BMF activities. We will make unaudited financial statement of the BMF, final reports of studies and reports produced by the BMF available to you at no cost as Confidential Information. We will make materials produced by the BMF for franchisee use available to you. We may suspend, terminate or reinstate the BMF at any time. The BMF will not terminate, however, until we have spent all amounts in the BMF for the purposes set forth above. (Franchise Agreement Section 10.B.).
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 37–45)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the Brand Marketing Fund (BMF) will not be separately audited. A Brand Marketing Fund Committee, composed of six franchisees and two Chem Dry corporate staff members, advises Chem Dry on the BMF. Franchisee members are appointed by Chem Dry and typically serve a one-year term, with the option to extend up to four years.
Chem Dry is not obligated to spend BMF amounts for a franchisee's direct benefit in proportion to their contribution, and they do not guarantee any specific benefit from BMF activities. However, Chem Dry will provide unaudited financial statements and final reports of studies produced by the BMF to franchisees as confidential information, free of charge. They will also make materials produced by the BMF available for franchisee use.
Chem Dry retains the right to suspend, terminate, or reinstate the BMF at any time, but termination will only occur after all amounts in the BMF have been spent for their intended purposes. This means that while franchisees contribute to the fund, its management and auditing are controlled by Chem Dry, with franchisees receiving unaudited financial statements.