What accounting procedures and chart of accounts must a Baya Bar franchisee use?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
12.2 Bookkeeping and Reports.
- 12.2.1 Franchisee agrees to keep and maintain complete and accurate books and records of its transactions and business operations using the accounting procedures and chart of accounts specified by Franchisor. Franchisee agrees to purchase the POS System and other computer systems specified in Section 12.3 to maintain the records and accounts of the Franchisee to the standards of the Franchisor. Franchisee acknowledges and agrees that the financial data of Franchisee's Franchised Business (i) is owned by Franchisor, (ii) is Franchisor's Proprietary Information, (iii) may be published in franchise disclosure document(s) issued by Franchisor following the Effective Date hereof, and (iv) may be shared with other franchisees in the System.
- 12.2.2 Within thirty (30) days after the close of each calendar quarter and within ninety (90) days after the close of each fiscal year, Franchisee will furnish Franchisor a full and complete written statement of income and expense and a profit and loss statement for the operation of the Franchised Business during said period, together with a balance sheet for the Franchised Business, all of which shall be prepared in accordance with generally accepted accounting principles and practice. Franchisee's annual statements and balance sheets shall be prepared by an independent certified public accountant and certified to be correct.
- 12.2.3 The financial statements required hereunder shall be in such form and contain such information as Franchisor may from time to time reasonably designate.
- 12.2.4 Franchisor reserves the right to require Franchisee to engage the services of a third-party accounting services firm, designated and approved by Franchisor, in the event that (i) Franchisee fails to keep books and records in accordance with Franchisor's standards or (ii) Franchisor, in its sole discretion, determines
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, franchisees must maintain complete and accurate books and records of their transactions and business operations, adhering to the accounting procedures and chart of accounts specified by Baya Bar. To meet these standards, franchisees are required to purchase the POS System and other computer systems that Baya Bar specifies. The financial data from the franchisee's business is considered Baya Bar's proprietary information and may be published in franchise disclosure documents and shared with other franchisees.
Within 30 days after each calendar quarter and 90 days after each fiscal year, franchisees must provide Baya Bar with a written statement of income and expense, as well as a profit and loss statement, for the operation of the franchise. These statements, along with a balance sheet, must be prepared according to generally accepted accounting principles. The annual statements and balance sheets must be prepared and certified by an independent certified public accountant.
The financial statements required must be in a form and contain information that Baya Bar reasonably designates from time to time. Baya Bar retains the right to require a franchisee to engage a third-party accounting services firm, designated and approved by Baya Bar, if the franchisee fails to keep books and records according to Baya Bar's standards, or if Baya Bar determines it necessary.