Does the Apricot Lane FDD include notes to the financial statements of 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 accounting. The Company also withholds and pays income tax in multiple states where required.
Management believes that all of the positions taken by the Company in its federal and state income tax returns are more likely than not to be sustained upon examination. The Company's tax returns are subject to examinations by the Internal Revenue Service and the state authorities, generally for three years and four years, respectively after they are filed.
Cash and Cash Equivalents
The Company considers all short-term investments that are convertible into a known amount of
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 51)
What This Means (2025 FDD)
According to the 2025 Apricot Lane FDD, the document includes notes to the financial statements of Country Visions, Inc. Specifically, Note 1 provides a summary of significant accounting policies. This note details several aspects of Country Visions' financial practices.
The note outlines the business activity of Country Visions, Inc., which involves marketing franchises for Apricot Lane boutiques. It mentions that franchise terms are generally for an initial ten-year period, with the option for two additional five-year terms. As of December 31, 2023, there were 112 franchised stores operating in the United States.
The note also describes the basis of accounting, stating that the financial statements are prepared using the accrual method in accordance with Generally Accepted Accounting Principles in the United States of America (U.S. GAAP). Furthermore, it explains how revenues from franchise fees are recognized, which is when all services specified by the franchise agreement have been performed, typically when the franchisee's store opens. The initial franchise fee for 2023 and 2022 was $39,500, and the franchise fee for additional stores is $15,000.
Finally, the note addresses income taxes, indicating that the company has elected to be taxed as an S corporation for federal income tax and California franchise tax purposes. It also mentions that the company considers all short-term investments with an original maturity date of three months or less to be cash equivalents.