At least how often must a Beauty Bungalows franchisee's balance sheets be prepared or compiled?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.01 Records. Franchisee must keep and transmit complete and accurate Business Records on a current basis relating to the Business in the form, time, and manner that Franchisor prescribes. Franchisee must provide Franchisor with all hard copies, and access to electronic reports, as reasonably prescribed. Franchisee must maintain an accounting system, which accurately reflects all operational aspects of the Franchise including uniform reports as may be required by Franchisor. Franchisee must maintain its accounting using the software programs we designate (or other software as specified in the Manual) and using the account types as specified by Franchisor from time to time. Franchisee must submit to Franchisor current financial statements and other reports as Franchisor may reasonably request to evaluate or compile research data on any operational aspect of the Franchise. Franchisor reserves the right to require that Franchisee make available its sales records and files by way of an Internet connection. Business Records will specifically also include, without limitation, the following:
- (a) tax returns;
- (b) profit and loss statements detailing Gross Revenue and expenses for the period, to be prepared each month for the preceding month and quarterly for the prior quarter;
- (c) profit and loss statements, prepared or compiled annually by an independent Certified Public Accountant annually; and
- (d) balance sheets, to be prepared or compiled at least annually by an independent Certified Public Accountant.
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, franchisees must have balance sheets prepared or compiled at least annually. Specifically, these balance sheets must be prepared or compiled by an independent Certified Public Accountant.
This requirement ensures that Beauty Bungalows franchisees maintain sound financial record-keeping practices. The annual balance sheet provides a snapshot of the franchisee's assets, liabilities, and equity at a specific point in time, offering insights into the financial health of the business.
Having an independent Certified Public Accountant (CPA) prepare or compile the balance sheet adds a layer of credibility and accuracy to the financial reporting. This helps Beauty Bungalows monitor the financial performance of its franchisees and ensures compliance with accounting standards. Franchisees must submit these balance sheets to Beauty Bungalows, allowing the franchisor to evaluate and compile research data on the operational aspects of the franchise.