Is the annual statement of the Hyper Kidz Brand Development Fund audited?

According to Hyper Kidz's 2024 Franchise Disclosure Document, the annual statement of money collected and costs incurred by the Brand Development Fund is not audited. Instead, Hyper Kidz will prepare an annual, unaudited statement within 120 days after each fiscal year end, and furnish it to franchisees upon written request.

This means that franchisees will receive a report on the fund's financial activity, but it will not have been reviewed or verified by an independent auditing firm. While this is permitted, it is important for prospective franchisees to understand that the information provided in the statement has not been independently verified for accuracy.

It is common practice in the franchise industry for franchisors to maintain a brand fund to support marketing and advertising efforts. While some franchisors provide audited statements, others, like Hyper Kidz, provide unaudited statements. Franchisees who want more assurance about the fund's financial management may want to discuss this with Hyper Kidz and potentially request access to additional financial information to gain a better understanding of how the funds are being managed.