Is the Chocolate Fish Coffee Brand Fund audited?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
Advertising Fund. You and all other franchisees must contribute to our Brand Fund. Your contribution is 1% of gross sales per week. We reserve the right to have other franchisees contribute a different amount or at a different rate. Outlets that we own are not obligated to contribute to the Brand Fund. We administer the fund. The fund is not audited. We will make unaudited annual financial statements available to you upon request.
Because we are a new franchisor, we did not spend any money from the Brand Fund in our most recently concluded fiscal year.
If less than all Brand Funds are spent in the fiscal year in which they accrue, the money will remain in the Brand Fund to be spent in the next year.
No money from the Brand Fund is spent principally to solicit new franchise sales.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 20–27)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the Brand Fund is not audited. Franchisees are required to contribute 1% of their gross sales per week to the Brand Fund. Chocolate Fish Coffee will administer the fund and provide unaudited annual financial statements to franchisees upon request.
Because Chocolate Fish Coffee is a new franchisor, they did not spend any money from the Brand Fund in their most recently concluded fiscal year. If the Brand Fund has money left over at the end of the fiscal year, the money will remain in the Brand Fund to be spent in the next year. The Brand Fund will not be used to solicit new franchise sales.
Typically, larger or more established franchise systems will conduct an audit of their brand fund to ensure transparency and accountability in how the funds are managed. The absence of an audit for Chocolate Fish Coffee's Brand Fund may be a point of consideration for prospective franchisees, especially as the system grows and the fund accumulates more substantial amounts.