Will Chem Dry provide an accounting of the advertising fund if requested by a franchisee?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
o the BMF may be used to pay taxes associated with unspent amounts on deposit in the BMF.
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- We will direct all activities and programs funded by the BMF with the assistance of a Chem-Dry Brand Marketing Fund Committee (the "Committee"). The Committee will be an advisory board comprised of franchisees and CDI corporate staff. 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.
**11.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, while the Brand Marketing Fund (BMF) is not audited, Chem Dry will provide an unaudited financial statement and a summary of expenditures, known as the "Annual Report," to franchisees upon written request. This report covers the most recently ended fiscal year and is considered Confidential Information.
This means that franchisees can request and receive a report outlining how the BMF was used, offering some transparency into the fund's activities. However, the report is unaudited, so its accuracy is not verified by an independent third party. Franchisees should be aware that Chem Dry has no obligation to ensure that BMF expenditures provide a specific or proportionate benefit to each franchisee's contribution, and there is no guarantee of any benefit from BMF activities.
Chem Dry also directs all activities and programs funded by the BMF with the assistance of a Chem-Dry Brand Marketing Fund Committee (the "Committee"). The Committee will be an advisory board comprised of franchisees and CDI corporate staff. This committee offers some franchisee input into how the fund is managed.
Prospective franchisees should consider the implications of contributing to a marketing fund that is not independently audited and where the benefits may not be directly proportional to their contributions. They should also inquire about the composition and activities of the Chem-Dry Brand Marketing Fund Committee to understand the level of franchisee input in marketing decisions.