Who must prepare the annual statements and balance sheets for a Baya Bar franchise?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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, the franchisee is required to furnish the franchisor with a full and complete written statement of income and expense, as well as a profit and loss statement, for the operation of the franchised business within thirty days after the close of each calendar quarter and within ninety days after the close of each fiscal year. These financial documents must be accompanied by a balance sheet for the franchised business.
These financial statements, including the annual statements and balance sheets, must be prepared in accordance with generally accepted accounting principles. Crucially, the franchisee's annual statements and balance sheets must be prepared by an independent certified public accountant and certified to be correct.
Baya Bar also retains the right to mandate that a franchisee engage the services of a third-party accounting services firm, designated and approved by Baya Bar, if the franchisee fails to maintain books and records in accordance with Baya Bar's standards, or if Baya Bar determines that the franchisee's bookkeeping is not up to par. This ensures that Baya Bar has access to accurate and reliable financial information from all of its franchise locations, and can step in to ensure compliance if necessary.