Can Red Wagon Club have the Brand Fund audited annually?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
We will prepare an annual, unaudited statement of Brand Fund collections and expenses and, once prepared, give you the statement for the most recently completed fiscal year upon your written request. We may have the Brand Fund audited annually, at the Brand Fund's expense, by an independent certified public accountant.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 24–31)
What This Means (2024 FDD)
According to Red Wagon Club's 2024 Franchise Disclosure Document, Red Wagon Club may elect to have the Brand Fund audited annually. The audit, if conducted, would be at the Brand Fund's expense and performed by an independent certified public accountant.
Red Wagon Club will prepare an annual, unaudited statement of Brand Fund collections and expenses and provide it to franchisees upon written request. This statement offers a basic overview of the Brand Fund's financial activity, but it has not been verified by an independent auditor.
The option for Red Wagon Club to conduct an audit provides a mechanism for greater financial transparency and accountability, though it is not an obligation. A prospective franchisee should consider the implications of the Brand Fund potentially not being audited, and should inquire about the circumstances under which Red Wagon Club would choose to conduct an audit. Franchisees may want to discuss with Red Wagon Club under what conditions they would choose to have the Brand Fund audited, and if franchisees have any input into this decision.