When preparing Ben Jerrys' consolidated financial statements, what is management required to evaluate regarding the company's ability to continue as a going concern?

According to Ben Jerrys' 2025 Franchise Disclosure Document, when preparing the consolidated financial statements, management must evaluate whether there are conditions or events that, when considered in total, raise substantial doubt about the company's ability to continue as a going concern for one year after the date the consolidated financial statements are issued. This evaluation is a standard accounting practice to ensure that the financial statements provide an accurate representation of the company's financial health and stability.

This "going concern" assessment is crucial for prospective Ben Jerrys franchisees because it indicates whether the company is expected to remain operational and financially stable in the foreseeable future. If there are significant doubts about the company's ability to continue as a going concern, it could impact its ability to support franchisees, invest in the brand, and maintain the overall franchise system.

In the case of Ben Jerrys, the consolidated financial statements have been prepared with the understanding that Ben & Jerry's Homemade, Inc. has the ability and intent to financially support the Company's operations so as to enable the Company to meet its obligations as they become due through April 30, 2026, via a parental support letter dated March 5, 2025. This support from the parent company provides additional assurance regarding Ben Jerrys' financial stability and its ability to meet its obligations in the near term. A prospective franchisee should review these statements and notes carefully and discuss any concerns with a financial advisor.