How will Extreme Art Studio account for monies collected on behalf of a Local Advertising Cooperative?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- 9.4.4 The monies collected by us on behalf of a Local Advertising Cooperative will be accounted for separately by us from our other funds and will not be used to defray any of our general operating expenses. You agree to submit to us and the Local Advertising Cooperative any reports that we or the Local Advertising Cooperative require. Each cooperative must prepare annual unaudited financial statements, and such statements will be provided for review to each member of such cooperative.
- 9.4.5 You understand and acknowledge that the Franchised Business might not benefit directly or in proportion to its contribution to the Local Advertising Cooperative from the development and placement of advertising and the development of marketing materials. Local Advertising Cooperatives for Extreme Art Studio Businesses will be developed separately, and no cooperative will be intended to benefit the others. We will have the right, but not the obligation, to use collection agents and to institute legal proceedings to collect amounts owed to the Local Advertising Cooperative on behalf of and at the expense of the Local Advertising Cooperative and to forgive, waive, settle and compromise all claims by or against the Local Advertising Cooperative. Except as expressly provided in this Section 9.4, we assume no direct or indirect liability or obligation to you with respect to the maintenance, direction or administration of the Local Advertising Cooperative.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the monies collected by Extreme Art Studio on behalf of a Local Advertising Cooperative will be accounted for separately from its other funds. These funds will not be used to cover Extreme Art Studio's general operating expenses. Franchisees are required to submit any reports requested by Extreme Art Studio or the Local Advertising Cooperative.
Each Local Advertising Cooperative must prepare annual unaudited financial statements, which will be available for review by each member of the cooperative. This ensures transparency and allows franchisees to see how the cooperative's funds are being managed and spent.
Extreme Art Studio retains the right to use collection agents and initiate legal proceedings to collect amounts owed to the Local Advertising Cooperative, at the cooperative's expense. They can also forgive, waive, settle, and compromise claims by or against the Local Advertising Cooperative. However, Extreme Art Studio assumes no direct or indirect liability or obligation to franchisees regarding the maintenance, direction, or administration of the Local Advertising Cooperative, except as expressly provided in the relevant section of the Franchise Agreement.