When must an Auntie Annes franchisee furnish a profit and loss statement and balance sheet?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
We have the right to demand audited financial statements if a financial-related default has occurred under this Agreement within the last calendar year.
- 14.5 Tax Returns.
No later than 90 days following our request, you must furnish to us exact copies of all tax returns, including federal, state, and any local income tax returns relating to the Franchised Business or you or your Entity.
- 14.6 Financial Records.
You must accurately and completely record all revenues the Franchised Business receives or is entitled to receive.
You must keep and maintain accurate and complete books, records, tax returns, and all business, personnel, financial, and operating records related to the Franchised Business, including related supporting material, such as bank statements, POS tapes/records, cash receipts and credit and charge records, for at least 3 years.
These financial records may not be commingled with records for other businesses.
If you have commingled your franchised records for various businesses, we have the right to review and audit the records for all commingled businesses.
- 14.7 Initial Investment Statements.
You must submit to us, using the forms that we provide to you, complete and accurate statements of (i) the costs that you incurred developing the Franchised Business prior to the Opening Date, which shall be due to us within 30 calendar days after the Opening Date and (ii) the costs you incur during the first 90 days of operating your Franchised Business, which shall be due to us within 120 calendar days after the Opening Date.
- 14.8 Additional Information.
You shall respond promptly to requests from us for clarification and/or additional information regarding any matter entrusted to you under this Agreement.
You will inform us from time to time on our request of: (i) all prices you charge for Products you sell;
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Anne's 2024 Franchise Disclosure Document, Auntie Anne's has the right to demand audited financial statements from a franchisee if a financial-related default has occurred under the Franchise Agreement within the last calendar year. Additionally, no later than 90 days following Auntie Anne's request, the franchisee must furnish exact copies of all tax returns, including federal, state, and any local income tax returns relating to the Franchised Business or the franchisee's entity.
Furthermore, Auntie Anne's requires franchisees to accurately and completely record all revenues the Franchised Business receives or is entitled to receive. Franchisees must keep and maintain accurate and complete books, records, tax returns, and all business, personnel, financial, and operating records related to the Franchised Business, including related supporting material, such as bank statements, POS tapes/records, cash receipts and credit and charge records, for at least 3 years. These financial records may not be commingled with records for other businesses. If the franchisee has commingled their franchised records for various businesses, Auntie Anne's has the right to review and audit the records for all commingled businesses.
Within 30 calendar days after the Opening Date, the franchisee must submit to Auntie Anne's complete and accurate statements of the costs that they incurred developing the Franchised Business prior to the Opening Date, using the forms that Auntie Anne's provides. The franchisee must also submit the costs incurred during the first 90 days of operating the Franchised Business within 120 calendar days after the Opening Date.
Finally, Auntie Anne's states that franchisees shall respond promptly to requests from them for clarification and/or additional information regarding any matter entrusted to them under the Franchise Agreement. Franchisees will inform Auntie Anne's from time to time on their request of all prices they charge for Products they sell.