Are there any circumstances under which the Chem Dry FDD would not include audited financial statements?
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 21 — FINANCIAL STATEMENTS (FDD page 68)
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, referred to as the "Annual Report," annually. This report will be available to franchisees upon written request and is considered Confidential Information.
The BMF is used for marketing activities and programs, directed by Chem Dry with the assistance of a Chem-Dry Brand Marketing Fund Committee, which includes both franchisees and CDI corporate staff. The funds may also be used to cover taxes associated with unspent amounts in the BMF.
While the BMF itself is not audited, Chem Dry is obligated to provide franchisees with the Annual Report, offering some level of transparency regarding the fund's financial activities. Franchisees should be aware that contributions to the BMF do not guarantee a specific or proportionate benefit, and Chem Dry does not warrant any particular outcome from BMF activities.