Why can't Assetco provide three years of financial statements for the Bft franchise?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Attached to this Disclosure Document as Exhibit C are Assetco's audited financial statements which comprise the balance sheets as of December 31, 2024 and 2023, and related statements of operations, changes in member's equity, and cash flows and the related notes to the financial statements for the year ended December 31, 2024 and for the period from March 6, 2023 to December 31, 2023. Assetco was formed in March 2023, and therefore, is unable to provide three years of financial statements. We are a wholly-owned subsidiary of Assetco, and Assetco absolutely and unconditionally guarantees to assume our duties and obligations under the Franchise Agreements and Multi-Unit Agreements entered into while we are the wholly owned subsidiary of Assetco. A copy of the Assetco guarantee is attached as Exhibit D. Our and Assetco's fiscal year ends on December 31 of each year.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Assetco cannot provide three years of financial statements because it was formed in March 2023. The FDD includes Assetco's audited balance sheets as of December 31, 2024, and 2023, along with related statements of operations, changes in member's equity, and cash flows for the year ended December 31, 2024, and for the period from March 6, 2023, to December 31, 2023.
Because Assetco is guaranteeing Bft's obligations as franchisor, the absence of a three-year financial history could be a concern for prospective franchisees. To mitigate this, Assetco provides an absolute and unconditional guarantee to assume Bft's duties and obligations under the Franchise Agreements and Multi-Unit Agreements while Bft remains a wholly-owned subsidiary of Assetco. This guarantee is included as Exhibit D in the FDD.
Prospective franchisees should carefully review Assetco's financial statements and the guarantee to assess the financial stability of both Assetco and Bft. It is important to understand the implications of relying on a guarantor with a limited operating history. Consulting with a financial advisor is recommended to evaluate the risks and benefits associated with this arrangement.