What could cause actual results to vary from estimates in Aw's financial statements?

According to Aw's 2025 Franchise Disclosure Document, the financial statements' preparation requires management to make estimates and assumptions. These estimates and assumptions impact the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the financial statements' date, and the reported amounts of revenues and expenses during the reporting period. As a result, the actual financial results for an Aw franchise could differ from these initial estimates.

This disclosure is a standard accounting practice. It acknowledges that financial statements are not precise due to the inherent uncertainties in business and the need for management to make informed judgments. These estimates can relate to various aspects of the business, such as the valuation of assets, the prediction of future revenues, or the assessment of potential liabilities.

For a prospective Aw franchisee, this means that the financial projections provided should be viewed as estimates rather than guarantees. While these estimates are based on management's best judgment and available information, various factors can cause actual results to deviate. Therefore, franchisees should conduct their own due diligence, carefully review the assumptions underlying the financial statements, and consider potential risks and uncertainties that could affect their business's financial performance.

It is important for potential franchisees to discuss these estimates with the franchisor to understand the basis for them and the potential range of variability. Additionally, consulting with a financial advisor can help franchisees assess the reasonableness of the estimates and develop their own financial projections based on their specific circumstances.