Is the Brand Fund considered an asset of Extreme Art Studio?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- 9.3.5 The Brand Fund is not our asset.
Although the Brand Fund is not a trust, we will hold all Brand Fund Contributions for the benefit of the contributors and use contributions only for the purposes described in this Section.
We do not have any fiduciary obligation for administering the Brand Fund or for any other reason.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the Brand Fund is explicitly stated not to be an asset of Extreme Art Studio. While the Brand Fund is not a trust, Extreme Art Studio holds all contributions for the benefit of the contributors and will use them only for the purposes outlined in the FDD. Extreme Art Studio does not have any fiduciary obligation for administering the Brand Fund.
Extreme Art Studio accounts for the Brand Fund separately from its other funds. The Brand Fund can spend more or less than the total contributions in a fiscal year, borrow funds (with reasonable interest), or invest any surplus for future use. Any interest earned on Brand Fund contributions will be used to pay costs before using the Brand Fund's other assets.
Extreme Art Studio will provide an annual, unaudited statement of Brand Fund collections and expenses upon written request. The purpose of the Brand Fund is to maximize recognition of the Marks, patronage of Extreme Art Studio Businesses, and the Extreme Art Studio brand generally. This separation of funds and the statement that the Brand Fund is not an asset of Extreme Art Studio provides transparency to franchisees regarding the use of these marketing funds.