Is the Brand Fund for Extreme Art Studio audited?

According to the 2024 Extreme Art Studio Franchise Disclosure Document, the Brand Fund is not audited. However, Extreme Art Studio will prepare an annual, unaudited statement of Brand Fund collections and expenses, and provide it to franchisees upon written request. This statement will detail how the Brand Fund's proceeds were spent in the previous year.

While the Brand Fund itself is not audited, Extreme Art Studio does account for it separately from their other funds. This separation of funds provides some level of transparency, even without a formal audit. The Brand Fund is not considered an asset of Extreme Art Studio, and contributions are to be used specifically for the purposes outlined in the FDD, benefiting the contributors.

Prospective franchisees should be aware that the absence of an independent audit means the financial statement's accuracy is not verified by an outside party. While Extreme Art Studio is obligated to provide the unaudited statement, franchisees may want to inquire about the level of detail included in the statement and the processes in place to ensure accurate accounting of the Brand Fund's income and expenses. It is common in the franchise industry for brand funds to be audited, so the lack of an audit may be a point of consideration for potential franchisees.