Do the Afuri Ramen Dumpling financial statements include notes to the financial statements?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
AFURI FRANCHISE, INC. NOTES TO FINANCIAL STATEMENTS
December 31, 2021 and 2020
NOTE 1. NATURE OF BUSINESS
Afuri Franchise, Inc. (the Company), was incorporated in Oregon on July 10, 2017. The Company is in the business of offering franchise opportunities for "Afuri Ramen + Dumpling" and "Afuri Izakaya" restaurants. Named after the Japanese mountain, Afuri's signature ramen is made with yuzu, a small yellow citrus fruit native to Asia and splashed with fresh chicken broth which pairs perfectly with charcoal-grilled pork.
The Company had three and two operating franchise restaurants in the United States at December 31, 2021 and 2020, respectively. The Company had agreements for six additional restaurants in the United States at December 31, 2021.
The Company had four operating franchise restaurants outside of the United States at December 31, 2021 and 2020. The Company had agreements for twelve additional restaurants outside of the United States at December 31, 2021.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of the major accounting policies of the Company is presented to assist the reader in evaluating the Company's financial statements. The financial statements and notes are representations of the Company's management, who is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
Foreign transactions – Transactions outside the United States include agreements with franchisees in Canada, Singapore, and Hong Kong. Foreign transactions are subject to risks inherent in transacting under different legal systems and various political and economic environments. Among the risks are changes in existing tax laws, possible limitations on foreign investment and income repatriation, government price or foreign exchange controls, and restrictions on currency exchange. The functional currency of all of the Company's foreign transactions is US dollars.
Cash and cash equivalents – For purposes of the statement of cash flows, the Company considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. The Company maintains its cash in bank accounts, which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts.
Source: Item 21 — Financial Statements (FDD pages 49–50)
What This Means (2024 FDD)
Yes, the 2024 FDD for Afuri Ramen Dumpling includes notes to the financial statements. These notes provide additional context and details about the company's financial performance and position.
The notes cover various aspects of Afuri Ramen Dumpling's business, including the nature of the business, which details the company's incorporation, its business as a franchisor for Afuri Ramen + Dumpling and Afuri Izakaya restaurants, and the number of operating and planned franchise restaurants both within and outside the United States. For example, the notes to the financial statements for December 31, 2023, state that Afuri Ramen Dumpling had one operating franchise restaurant in the United States and agreements for fourteen additional restaurants in the United States.
Additionally, the notes include a summary of significant accounting policies, such as the basis of presentation, cash and cash equivalents, foreign transactions, and trade accounts receivable. There are also notes on franchising, related party transactions, income taxes, and subsequent events, offering a comprehensive overview of the financial practices and potential risks associated with Afuri Ramen Dumpling. For instance, the notes detail that the initial franchise fee is $45,000, which includes required training costs, and that franchisees must pay monthly royalty and marketing fees.
The inclusion of these notes is standard practice in financial reporting, as it provides transparency and helps potential investors and franchisees better understand the financial statements. The notes are representations of the Company's management, who is responsible for their integrity and objectivity.