What is the deadline for a Bonchon franchisee to furnish the franchised Business's profit and loss statement and balance sheet to Bonchon?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
g the end of each calendar quarter during the term of this Agreement, you agree to furnish to us, in a form we approve, a statement of the franchised Business's profit and loss for the quarter and a balance sheet as of the end of the quarter. You must certify these statements to be true and correct.
- B. No later than 90 days following the end of each of your fiscal years during the term of this Agreement, you agree to furnish to us, in a form we approve, a statement of the franchised Business's profit and loss for the fiscal year and a balance sheet as of the end of the fiscal year, prepared on a compilation basis and certified to be true and correct by you. We reserve the right to require these annual financial statements to be audited by an independent certified public accountant.
- C. The financial statements required above must be prepared in accordance with United States generally accepted accounting principles, including all disclosures required under those principles.
- D. No later than 30 days following your filing of the annual tax returns of the franchised business, you agree to furnish to us exact copies of the tax returns, including federal, state and any local income tax returns, together with a certificate from an independent certified public accountant that all Social Security payments, taxes and fees required to be paid by you to any governmental agency or entity have been paid, and that if you are a business entity, there is no reason to believe that your entity's status has been impaired.
- E. You must also provide any other information that we reasonably request from time to time.
- F. If you do not timely furnish to us any of the financial statements or tax returns required above in this Article 10 then you agree to pay us a late charge of $50 per month that each financial statement or tax return is overdue.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, franchisees must furnish the franchised Business's profit and loss statement and balance sheet to Bonchon no later than 90 days following the end of each fiscal year during the term of the Franchise Agreement. These financial statements must be prepared on a compilation basis and certified as true and correct by the franchisee. Bonchon retains the right to require that these annual financial statements be audited by an independent certified public accountant.
The financial statements must adhere to United States Generally Accepted Accounting Principles (GAAP), including all required disclosures. Additionally, franchisees must provide exact copies of their annual tax returns, including federal, state, and local income tax returns, within 30 days of filing. This must include a certificate from an independent certified public accountant confirming that all required Social Security payments, taxes, and fees have been paid to governmental agencies, and if the franchisee is a business entity, that its status has not been impaired.
Failure to provide the required financial statements or tax returns on time will result in a late charge of $50 per month for each overdue document. Bonchon also reserves the right to terminate the Franchise Agreement if these documents are not submitted, providing notice and an opportunity to correct the default. Bonchon is authorized to use information from these financial statements in its franchise disclosure document and promotional materials, as long as individual Bonchon businesses are not identified.
This requirement ensures that Bonchon has access to accurate and timely financial information from its franchisees, allowing for effective monitoring and management of the franchise system. Franchisees should be aware of these deadlines and ensure they have systems in place to comply with these requirements to avoid penalties or potential termination of their franchise agreement.