Will Extreme Art Studio provide an accounting for the Brand Fund to franchisees?
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 Extreme Art Studio's 2024 Franchise Disclosure Document, Extreme Art Studio will provide an annual unaudited accounting for the Brand Fund. This accounting will show how the Brand Fund proceeds have been spent for the previous year. However, this accounting is only provided upon written request from the franchisee.
It's important to note that the Brand Fund itself is not audited. Additionally, the FDD states that Extreme Art Studio did not collect any Brand Fund Contributions during their last fiscal year, which ended December 31, 2023. This may indicate that the Brand Fund is newly established or has not been actively used recently.
For a prospective franchisee, this means that while Extreme Art Studio is willing to provide some transparency regarding the Brand Fund, the information is unaudited and requires a formal request. Franchisees should consider the implications of an unaudited accounting and the potential limitations of the information provided. It would be prudent to inquire about the historical activity of the Brand Fund and the franchisor's plans for its future use.