Why doesn't Azal Coffee provide the financial statements normally required in the FDD?

Based on the 2024 Franchise Disclosure Document, Azal Coffee includes a balance sheet as of July 11, 2024, as part of Exhibit H. This exhibit is labeled "FINANCIAL STATEMENTS." While a balance sheet is provided, the document does not contain a full set of audited financial statements, which typically includes an income statement, statement of cash flows, and notes to the financial statements.

This may be due to the fact that Durar Investment, LLC, the franchisor for Azal Coffee, was organized on December 28, 2022, and began offering franchises in July 2024. As a relatively new franchise system, Azal Coffee may not have a sufficient operating history to produce comprehensive audited financial statements.

A prospective franchisee should inquire with Azal Coffee about the absence of full financial statements. Specifically, they should ask for more detailed financial information to assess the franchisor's financial stability and ability to support its franchisees. This could include asking for unaudited financial statements, projections, or other relevant financial data. Understanding the franchisor's financial health is crucial for making an informed investment decision.