On what basis of accounting does Bath Tune Up prepare its consolidated financial statements?

According to the 2025 Bath Tune-Up FDD, the company prepares its consolidated financial statements on the accrual basis of accounting, following accounting principles generally accepted in the United States of America, also known as GAAP. This means that revenues and expenses are recognized when they are earned or incurred, regardless of when cash changes hands.

The accrual method provides a more accurate picture of a company's financial performance over time compared to the cash basis method, which only recognizes revenues and expenses when cash is received or paid. GAAP ensures that financial statements are presented in a consistent and transparent manner, allowing for easier comparison between different companies and industries.

For a prospective Bath Tune-Up franchisee, this information indicates that the financial data presented in the FDD and during the operation of their franchise will adhere to standard accounting practices. Understanding these practices is crucial for managing their business effectively and interpreting financial reports accurately. Franchisees should familiarize themselves with the basics of accrual accounting and GAAP to make informed decisions about their investment and operations.