Is a Bombs Away franchisee required to provide information to Bombs Away Franchising to prepare a financial performance representation for the FDD?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- (a) Financial Reports.
Franchisee shall provide such periodic financial reports as Bombs Away Franchising may require in the Manual or otherwise in writing, including:
(i) a monthly profit and loss statement and balance sheet for the Business within 30 days after the end of each calendar month;
(ii) an annual financial statement (including profit and loss statement, cash flow statement, and balance sheet) for the Business within 90 days after the end of Bombs Away Franchising's fiscal year; and
(iii) any information Bombs Away Franchising requests in order to prepare a financial performance representation for Bombs Away Franchising's franchise disclosure document.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, franchisees are required to provide information to Bombs Away Franchising to help them prepare a financial performance representation for the FDD. Specifically, franchisees must submit any information that Bombs Away Franchising requests for this purpose. This is part of the ongoing financial reporting requirements outlined in the franchise agreement.
In addition to providing information for the financial performance representation, Bombs Away franchisees must also submit other periodic financial reports. These include monthly profit and loss statements and balance sheets, which are due within 30 days after the end of each calendar month. Franchisees also need to provide an annual financial statement, including a profit and loss statement, cash flow statement, and balance sheet, within 90 days after the end of Bombs Away Franchising's fiscal year.
These reporting requirements ensure that Bombs Away Franchising has access to the financial data necessary to accurately represent the performance of its franchises. This information is crucial for potential franchisees who rely on the FDD to make informed decisions about their investment. Failing to provide the required information could result in the franchisor not being able to provide a financial performance representation in their FDD.