Will the Brand Fund for Extreme Art Studio be accounted for separately from other funds?

According to Extreme Art Studio's 2024 Franchise Disclosure Document, the Brand Fund will be accounted for separately from other funds. This means that the money collected for the Brand Fund, which is used for marketing and promoting the Extreme Art Studio brand, will be tracked and managed independently from the company's other financial accounts.

This separation of funds provides transparency and helps ensure that the contributions made by franchisees for marketing purposes are used specifically for those purposes. Extreme Art Studio franchisees contribute one percent (1%) of their gross sales to the Brand Fund. The Brand Fund is used to maximize recognition of the Extreme Art Studio brand generally.

Extreme Art Studio will provide an annual, unaudited statement of Brand Fund collections and expenses upon written request. While the Brand Fund is not a trust, Extreme Art Studio states that it will hold all Brand Fund Contributions for the benefit of the contributors and use contributions only for the purposes described in the FDD. However, Extreme Art Studio does not have any fiduciary obligation for administering the Brand Fund or for any other reason.

This arrangement is fairly typical in franchising, where marketing funds are common. Franchisees should still request and carefully review the annual statement to understand how the Brand Fund is being managed and how the contributions are being used to support the Extreme Art Studio brand.