Is the Fly Fitness Brand Fund audited?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
The Brand Fund is not audited. An annual unaudited financial statement of the Brand Fund is available to any franchisee upon written request.
If we spend more or less than the total of all contributions to the Brand Fund in any fiscal year, we may carry-forward any surplus or deficit to the next fiscal year.
As of our fiscal year ended December 31, 2023, no Brand Fund contributions were required, made, or expended. Although the Brand Fund is intended to be of perpetual duration, we may terminate it at any time and for any reason or no reason. We will not terminate the Brand Fund, however, until all monies in the Brand Fund have been spent for advertising or promotional purposes or returned to contributors, without interest, on the basis of their respective contributions.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 22–29)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the Brand Fund is not audited. However, Fly Fitness will provide an annual unaudited financial statement of the Brand Fund to any franchisee who requests it in writing.
As of the fiscal year ending December 31, 2023, no Brand Fund contributions were required, made, or spent. Fly Fitness retains the right to terminate the Brand Fund at any time, for any reason. However, Fly Fitness states that it will not terminate the Brand Fund until all monies in it have been spent for advertising or promotional purposes, or returned to the contributors without interest, based on their respective contributions.
It is typical in the franchise industry for brand funds to be audited, as this provides transparency and accountability to franchisees regarding how their contributions are being used. The fact that the Fly Fitness Brand Fund is not audited may be a point of concern for prospective franchisees, who may want to inquire further about the franchisor's financial management practices and oversight of the Brand Fund.