Will the Chem-Dry Brand Marketing Fund (BMF) be audited?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
The BMF will not be audited,
however an unaudited financial statement and a summary of expenditures (the "Annual Report") will be prepared annually by CDI. Upon your written request, we will provide the Annual Report to FRANCHISEE for the most recently ended fiscal year as Confidential Information. You acknowledge that we have no obligation to expend BMF amounts for BMF activities that provide a specific benefit equivalent or proportionate benefit to your BMF Contribution, and we do not warrant or guaranty that you will receive or derive any benefit from BMF activities. We will make final reports of studies and reports produced by the BMF available to you at no cost as Confidential Information. We will make all materials produced by the BMF for franchisee use in the Business 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.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, the Brand Marketing Fund (BMF) will not be audited. However, Chem-Dry will prepare an unaudited financial statement and a summary of expenditures, known as the Annual Report, each year.
As a Chem-Dry franchisee, you can request the Annual Report for the most recently ended fiscal year, which will be considered Confidential Information. This report will provide a summary of how the BMF was used. The BMF is used for marketing, advertising, promotional, public relations, and other similar activities intended to benefit the Chem-Dry system and all franchised and company-owned locations.
It is important to note that Chem-Dry does not guarantee that franchisees will receive a specific benefit equivalent to their BMF contributions, nor does it warrant any benefit from BMF activities. Chem-Dry also reserves the right to suspend, terminate, or reinstate the BMF at any time, but will spend all amounts in the BMF before terminating it.
While the BMF is not audited, the provision of an unaudited financial statement and expenditure summary offers some level of transparency to franchisees. Franchisees should review these reports carefully to understand how their contributions to the BMF are being used and to assess the effectiveness of the marketing initiatives. Franchisees may also want to discuss the BMF's performance and planned activities with the Chem-Dry Brand Marketing Fund Committee, which includes both franchisees and Chem-Dry corporate staff.