Is the accounting of the Spray Net advertising fund audited or unaudited?

According to Spray Net's 2025 Franchise Disclosure Document, the accounting of the advertising fund is initially unaudited. The FDD states that an unaudited accounting of the fund will be available to franchisees upon written request, 120 days after Spray Net's fiscal year end. However, Spray Net retains the right to have the fund reviewed, audited, or reported on by an independent certified public accountant, though they are under no obligation to do so. If Spray Net chooses to conduct an audit, the expense will be borne by the advertising fund itself.

This means that franchisees have the right to request an accounting of the advertising fund, but this accounting is not initially verified by an independent auditor. Spray Net has the option to conduct an audit, which would provide a higher level of assurance regarding the accuracy of the fund's financial records. However, franchisees cannot demand an audit, and Spray Net is not required to perform one.

In the franchise industry, it is common for franchisors to maintain advertising funds to promote the brand. While some franchisors provide regular audits of these funds, others only offer unaudited reports or reserve the right to audit at their discretion. Prospective Spray Net franchisees should consider the implications of this arrangement and may want to inquire about the frequency and scope of any audits that have been conducted in the past.

It is also important to note that Spray Net states that the advertising fund is not a trust, and the franchisor has no fiduciary duty to franchisees in administering the fund. This means that Spray Net is not legally obligated to act solely in the best interests of the franchisees when managing the fund, which is a departure from arrangements where a franchisor has a fiduciary duty to its franchisees.