For what years did the unqualified accountant prepare Bonchon's audited financial statements?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
anuary 6, 2020:
On March 28, 2019, we learned that the certified public accountant who had prepared our audited financial statements for 2016-2018 inclusive was actually unqualified to do so by virtue of his failure to satisfy two legal prerequisites mandated by the State of New York (in which state said accountant had his office). As soon as we learned of our prior accountant's ineligibility to issue an audit opinion letter, we immediately ceased all franchise sales activity nationwide and ultimately engaged a successor accounting firm to prepare new audited financial statements for the entire period in question (2016-2018 inclusive). In the course of performing this work, our successor accounting firm further determined that the prior accountant had made a number of accounting errors in connection with the 2016-2018 financial statements audited. The audited financial statements annexed to this Franchise Disclosure Document are true and correct in all respects and our successor accounting firm, whose audit letters appear in the accompanying financial statements, is
entirely qualified to conduct such audits and furnish such letters.
As a consequence of the foregoing, the State of Washington requested that we voluntarily enter into a Consent Order, which we did and which was signed and entered on January 6, 2020. The Consent Order imposed no fines or penalties but directs us to refrain from violating any provision of the "violations section" of the Washington Franchise Investment Protection Act. As well, we agreed to pay the State of Washington investigative costs of $250. Washington's Department of Financial Institutions concluded that Bonchon used a Franchise Disclosure Document with materially inaccurate financial statements to sell a franchise in Washington in violation of 19.100.170(2), which conclusion we neither admitted nor denied in the Consent Order. In connection with our entry into the Washington Consent Order, we neither admitted nor denied the findings of fact and conclusions of law set forth therein.
Other than the above, there is no litigation that must be disclosed in this Item.
Source: Item 3 — LITIGATION (FDD pages 11–12)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, the company learned on March 28, 2019, that the certified public accountant who had prepared their audited financial statements for 2016-2018 inclusive was unqualified to do so. This was due to the accountant's failure to meet legal prerequisites mandated by the State of New York, where the accountant's office was located.
Upon discovering the accountant's ineligibility, Bonchon immediately ceased all franchise sales activities nationwide. They then engaged a successor accounting firm to prepare new audited financial statements for the period of 2016-2018. The successor firm also found that the prior accountant had made several accounting errors in the original financial statements.
As a result of these issues, the State of Washington requested that Bonchon voluntarily enter into a Consent Order, which they did on January 6, 2020. While the Consent Order did not impose any fines or penalties, it directed Bonchon to avoid violating any provisions of the Washington Franchise Investment Protection Act. Bonchon also agreed to pay $250 for the State of Washington's investigative costs. The department concluded that Bonchon used a Franchise Disclosure Document with materially inaccurate financial statements to sell a franchise in Washington.