Are the financial statements for Best In Class Education Center audited or unaudited?
Best_In_Class_Education_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
Within 90 days after the end of each calendar year, you must prepare and send us a balance sheet (as of the end of the calendar year) and profit and loss statement for the prior calendar year.
Financial statements must be: (a) verified and signed by you certifying to us that the information is true, complete, and accurate; (b) prepared on an accrual basis in compliance with Generally Accepted Accounting Principles; and (c) submitted in any format we reasonably require.
We may require that your financial statements be reviewed or audited by a certified public accountant if you submit materially inaccurate financial statements on a prior occasion.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to the 2025 FDD, Best In Class Education Center requires franchisees to submit annual financial statements. These statements must be verified and signed by the franchisee, certifying their accuracy. The financial statements must be prepared on an accrual basis, following Generally Accepted Accounting Principles (GAAP), and submitted in a format that Best In Class Education Center requires.
While franchisees are responsible for providing these financial documents annually, Best In Class Education Center retains the right to request a review or audit of these statements by a certified public accountant if the franchisee has previously submitted materially inaccurate financial information. This provision allows Best In Class Education Center to ensure the accuracy and reliability of the financial data it receives from its franchisees.
This requirement ensures that Best In Class Education Center has access to standardized and reliable financial information from all franchise locations, which is essential for monitoring the overall financial health of the franchise system. The franchisor's right to request a formal audit provides an additional layer of oversight, protecting the integrity of the financial data and ensuring compliance with accounting standards.