Does the Apricot Lane FDD include an income statement for COUNTRY VISIONS?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
13 | Sales on POSIM | 28 | | 14 | Payment Methods | 10 |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity
Country Visions, Inc. markets franchises for Apricot Lane Boutique, a fashion and accessory boutique. Franchises generally have an initial ten-year term, with two additional five-year terms at the option of the franchises. At December 31, 2023 there were 112 franchised stores operating in the United States.
Basis of Accounting
The financial statements are prepared on the accrual method of accounting in accordance with Generally Accepted Accounting Principles in the United States of America (U.S. GAAP).
Revenue Recognition
Revenues from franchise fees are recognized when all services specified by the franchise agreement have been performed, generally when the franchisee's store opens. These services generally include site selection, lease negotiation, marketing, training of the franchisee, training of their employees, and store opening assistance. The initial franchise fee for 2023 and 2022 is $39,500, and the franchise fee for additional stores is $15,000.
Income Taxes
The Company has elected to be taxed as an S corporation for federal income tax and California franchise tax purposes. As a result, the Company does not pay federal corporate tax on its income; instead, the stockholders pay tax on their respective shares of such income. California has adopted similar provisions, except that there is a 1.5% franchise tax assessed on California taxable income and a minimum tax of $800. For income tax reporting purposes, the Company reports income on the cash basis of acco
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 51)
What This Means (2025 FDD)
Yes, the 2025 Apricot Lane FDD includes financial statements for Country Visions, Inc. Item 23 includes a summary of significant accounting policies for Country Visions, Inc., which markets franchises for Apricot Lane Boutique.
The summary notes that the financial statements are prepared using the accrual method of accounting, following Generally Accepted Accounting Principles in the United States of America (U.S. GAAP). It also states that revenues from franchise fees are recognized when all services specified by the franchise agreement have been performed, generally when the franchisee's store opens. The initial franchise fee for 2023 and 2022 is $39,500, and the franchise fee for additional stores is $15,000.
The document also mentions that Country Visions, Inc. has elected to be taxed as an S corporation for federal income tax and California franchise tax purposes. As a result, the company does not pay federal corporate tax on its income; instead, the stockholders pay tax on their respective shares of such income. California has adopted similar provisions, except that there is a 1.5% franchise tax assessed on California taxable income and a minimum tax of $800.