Is the Extreme Art Studio Brand Fund considered an asset of the franchisor?

According to the 2024 Extreme Art Studio Franchise Disclosure Document, the Brand Fund is not considered an asset of the franchisor. The document states clearly that "The Brand Fund is not our asset." This means that Extreme Art Studio does not own the funds contributed by franchisees for national advertising and marketing purposes. Although the Brand Fund is not a trust, Extreme Art Studio will hold all Brand Fund Contributions for the benefit of the contributors and use contributions only for the purposes described in the FDD.

Extreme Art Studio directs all programs that the Brand Fund finances, maintaining sole control over creative concepts, materials, endorsements, and their placement. The Brand Fund can be used for various advertising, promotion, and marketing activities, including preparing materials, maintaining websites, administering marketing programs, and supporting public relations. The Brand Fund may spend more or less than the total contributions in a given year, borrow funds to cover deficits, or invest any surplus for future use. All 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. This statement will show how the Brand Fund proceeds have been spent for the previous year. Extreme Art Studio retains the right to incorporate the Brand Fund or operate it through a separate entity, with the successor entity assuming all specified rights and duties. The primary 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.