Does Dryer Vent Squad specify that the Brand Development Fund accounting will be audited?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
Brand Development Fund We may control and administer a brand development fund (the "Brand Development Fund") (Franchise Agreement, Article 9.A.).
As disclosed in Item 6 of this Disclosure Document, you must contribute a monthly sum not to exceed 2% of monthly Gross Sales to the Brand Development Fund.
We may use the Brand Development Fund for market studies, research, service development, product development, testing, research studies, technology development, advertising and public relations studies or services, creative production and printing of advertising and marketing materials, advertising copy and commercials, tracking costs, agency fees, administrative costs, which may include reimbursement for direct administrative and personnel costs associated with advertising and public relations, and any other costs associated with the development, marketing and testing of advertising, marketing and public relations materials, and the purchase of media placement, advertising time and public relations materials in national, regional or other advertising and public relations media in a manner determined by us, in our discretion, to be in the best interest of the franchisees and the System.
Our company and/or affiliate owned Dryer Vent Squad Businesses may but are not required to contribute to the Brand Development Fund.
The Brand Development Fund will be required to maintain unaudited financial records detailing its expenditures and will make available to you (no more frequently than one time in any 12-month period) an unaudited accounting of how the monies contributed to the Brand Development Fund were spent each year.
We are not required to segregate the Brand Development Fund from our general operating funds and we are not a fiduciary or trustee of the Brand Development Fund.
The Brand Development Fund will not be used to directly promote your Dryer Vent Squad Business or the marketing area in which your Dryer Vent Squad Business will be located. (Franchise Agreement, Article 9.A.).
We may utilize the Brand Development Fund to develop and test various media and technologies for potential utilization and/or improvement of the operations of Dryer Vent Squad Businesses and the marketing of Dryer Vent Squad Businesses.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 30–36)
What This Means (2024 FDD)
According to the 2024 Dryer Vent Squad FDD, the Brand Development Fund's financial records will be unaudited. Dryer Vent Squad is not required to segregate the Brand Development Fund from its general operating funds and is not a fiduciary or trustee of the Brand Development Fund.
Dryer Vent Squad franchisees are required to contribute a monthly sum not to exceed 2% of monthly Gross Sales to the Brand Development Fund, as disclosed in Item 6. The Brand Development Fund can be used for various purposes, including market studies, research, service and product development, advertising, public relations, and administrative costs.
Dryer Vent Squad will make available to franchisees (no more frequently than once in any 12-month period) an unaudited accounting of how the monies contributed to the Brand Development Fund were spent each year. This means franchisees will receive a report on the fund's expenditures, but this report will not be subject to an independent audit to verify its accuracy.
The fact that the Brand Development Fund is unaudited may present a risk to franchisees, as there is less assurance that the funds are being managed and spent appropriately. A prospective franchisee may want to seek clarification from Dryer Vent Squad regarding the processes and controls in place to ensure the proper use of these funds.