Can Corporate Cleaning Group terminate the Brand Fund?
Corporate_Cleaning_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
m the production or placement of advertising from the Brand Fund.
The Brand Fund is not audited. An annual unaudited financial statement of the Brand Fund is available to any franchisee upon written request.
If we spend more or less than the total of all contributions to the Brand Fund in any fiscal year, we may carry forward any surplus or deficit to the next fiscal year.
In the fiscal year ending December 31, 2024, we collected $19,942.12. We contributed an additional $313,847 to the Brand Fund. In the fiscal year 2024, we used 20% of the Brand Fund on administrative expenses, and we used 80% of the Brand Fund for other expenses. Although the Brand Fund is intended to be of perpetual duration, we may terminate it at any time and for any reason or no reason. We will not terminate the Brand Fund, however, until all monies in the Brand Fund have been spent for advertising or promotional purposes or returned to contributors,
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 25–34)
What This Means (2025 FDD)
According to Corporate Cleaning Group's 2025 Franchise Disclosure Document, Corporate Cleaning Group has the right to terminate the Brand Fund at any time and for any reason. However, there is a stipulation that Corporate Cleaning Group must first spend all the money in the Brand Fund for advertising or promotional purposes, or return the money to the contributors. The return of funds would be without interest and based on the proportion of each contributor's contribution.
This clause gives Corporate Cleaning Group significant flexibility in managing the Brand Fund, but it also provides some assurance to franchisees that their contributions will be used appropriately or returned. It is important to note that the Brand Fund is not audited, but an annual unaudited financial statement is available to franchisees upon written request. For the fiscal year ending December 31, 2024, Corporate Cleaning Group collected $19,942.12 and contributed an additional $313,847 to the Brand Fund.
For a prospective franchisee, this means that while Corporate Cleaning Group can end the Brand Fund, they are obligated to use the existing funds for the benefit of the franchise system or return them to the franchisees. This could be a positive aspect, as it ensures that the contributions are not misused. However, the lack of an audit may raise concerns about transparency, making it important for franchisees to request and review the annual financial statements.