Where must financial performance information be included for B Bops?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 21: FINANCIAL STATEMENTS]
See Independent Auditors' Report and Notes to Financial Statements
Note 1 Nature of business and significant accounting policies
Nature of business:
B-Bop's Franchising Corporation ("the Company") was formed as a corporation to franchise B-Bop's restaurants throughout the United States. The Company had two franchise agreements during the year ended December 31, 2024.
Significant accounting policies:
Comparative Data
The amounts shown for the years ended December 31, 2023, 2022, and 2021 in the accompanying financial statements are included to provide a basis for comparison with 2024. Accordingly, the 2023, 2022, and 2021 totals are not intended to present all information necessary for a fair presentation in conformity with accounting principles generally accepted in the United States of America. Such information should be read in conjunction with the Company's financial statements for the years ended December 31, 2023, 2022, and 2021 from which the information was derived.
Reclassification
Certain accounts in the prior-year financial statements have been reclassified for comparative purposes to conform with the presentation in the current-year financial statements.
Basis of Accounting
The accounting records are maintained on the accrual basis of accounting, recording income and expenses when incurred. The financial statements present the financial position and changes in stockholder's equity in conformity with generally accepted accounting principles.
Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Cash Equivalents
The Corporation considers all highly liquid debt instruments purchased with a maturity at inception of three months or less to be cash equivalents.
Franchise Fee Receivable
The franchise fee receivable is stated at the amount management expects to collect from outstanding balances. Management does not consider an allowance for doubtful accounts necessary.
See Independent Auditors' Report
Note 1 Nature of business and significant accounting policies (continued)
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATION (FDD pages 49–50)
What This Means (2025 FDD)
Based on the 2025 B Bops Franchise Disclosure Document, Item 21, titled "Financial Statements", includes the financial performance information. This section incorporates the Independent Auditors' Report and the Notes to Financial Statements. These audited financial statements provide prospective franchisees with an overview of B Bops's financial health and historical performance.
The financial statements include comparative data from previous years (2021, 2022, and 2023) to offer a basis for comparison with 2024. However, the FDD clarifies that the data from prior years may not present all the information necessary for a complete presentation following generally accepted accounting principles. Therefore, this information should be read alongside the company's full financial statements from those years.
Item 21 also includes the auditor's responsibilities and opinions regarding the financial statements. The auditors are tasked with obtaining reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error. They evaluate accounting policies, significant estimates made by management, and the overall presentation of the financial statements. This audit provides an additional layer of scrutiny and validation for the financial information presented, enhancing its reliability for potential investors.