Is the Brand Fund financial statement for Chocolate Fish Coffee audited?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
edures for our system.
- F. Brand Fund. We will administer the Brand Fund (Section 5.5). We will prepare an unaudited annual financial statement of the Brand Fund within 120 days of the close of our fiscal year and will provide the financial statement to you upon request. (Section 9.3)
- G. Website. We will maintain a website for the Chocolate Fish Coffee brand, which will include your business information and telephone number. (Section 5.5)
Advertising
Our obligation. We will use the Brand Fund only for marketing and related purposes and costs. Media coverage is primarily local. We use outside vendors and consultants to produce advertising. We are not required to spend any amount of advertising in the area or territory where any particular franchisee is located. We will maintain the brand website (which may be paid for by the Brand Fund).
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's financial statements are not audited. The FDD states that Chocolate Fish Coffee will prepare an unaudited annual financial statement of the Brand Fund within 120 days of the close of their fiscal year and will provide it to franchisees upon request. Additionally, the FDD mentions that the fund itself is not audited.
This means that the financial information provided to franchisees regarding the Brand Fund has not been independently verified by a certified public accountant. While Chocolate Fish Coffee is obligated to provide these statements, franchisees should be aware that the figures presented are based on the franchisor's internal accounting and have not undergone external scrutiny.
Prospective franchisees should consider the implications of receiving unaudited financial statements. It is advisable to carefully review these statements and potentially consult with a financial advisor to fully understand the Brand Fund's financial position. It's also important to note that 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.