Is the Extreme Art Studio Brand Fund audited?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
The Brand Fund is not audited. We will provide an annual unaudited accounting for the Brand Fund that shows how the Brand Fund proceeds have been spent for the previous year upon written request. We did not collect any Brand Fund Contributions during our last fiscal year, ended December 31, 2023.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 27–37)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, the Brand Fund is not audited. However, Extreme Art Studio will provide an annual unaudited accounting for the Brand Fund, showing how the proceeds were spent in the previous year, upon written request.
This means that while franchisees contribute a percentage of their gross sales to the Brand Fund, there is no independent audit to verify how those funds are being managed and spent. Instead, Extreme Art Studio provides an unaudited accounting statement.
For a prospective franchisee, this implies a need to carefully review the annual unaudited accounting statements provided by Extreme Art Studio to understand how the Brand Fund is being utilized. It also highlights the importance of asking the franchisor detailed questions about the Brand Fund's governance and expenditure decisions.