Is the financial report of the Pearce Bespoke Brand Fund audited?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
The Brand Fund will have the characteristics and be operated according to the terms contained in this section. Franchisor has sole discretion over all matters relating to its operations and is solely
responsible for its financial management. The Brand Fund will be accounted for separately and contributions may be used to pay for taxes related to the Fund and all administrative, accounting, audit, legal and other costs related to Fund activities and purposes and/or as authorized by the relevant Franchise Agreements. Franchisor will prepare and provide franchisees each calendar year a financial report of revenues and expenditures for the Brand Fund, which report may or may not be audited at Franchisor's discretion. The Brand Fund may be used as Franchisor considers appropriate, including for, but not limited to, the costs of preparing and conducting radio, television, electronic and print advertising campaigns in any local, regional or national medium; utilizing networking media social sites, such as Facebook, Twitter (x), Bluesky, Instagram, TikTok, YouTube, Threads, LinkedIn, and on-line blogs and forums; developing, maintaining, and updating a World Wide Web or Internet site for the System; direct mail advertising; deploying social networking promotional initiatives through online media channels; marketing surveys; employing advertising and/or public relations agencies to provide assistance; purchasing promotional items; conducting and administering promotions and "mystery shopper" program(s); implementation and use of customer relationship management software and solutions; and providing promotional and other marketing materials and services to the Pearce Bespoke franchises operating under the System. Franchisor is not required to spend any amount of the Fund in Franchisee's Franchised Territory. Franchisor may use a portion of the Brand Fund for the costs and overhead, if any, it incurs in activities reasonably related to the implementation of advertising and marketing programs for franchisees.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the financial report of the Brand Fund may or may not be audited. Pearce Bespoke will provide franchisees with a financial report of revenues and expenditures for the Brand Fund each calendar year. However, whether this report is audited is at Pearce Bespoke's discretion.
This means that prospective franchisees should be aware that the financial reporting for the Brand Fund might not be subject to independent verification. While Pearce Bespoke is responsible for the Brand Fund's financial management, the lack of a mandatory audit could raise concerns about transparency and accountability.
Franchisees might want to inquire about Pearce Bespoke's historical practices regarding Brand Fund audits and the circumstances under which an audit would be conducted. Understanding the level of oversight and assurance provided for the Brand Fund's financials is crucial for franchisees contributing to the fund.