What accounting principles must Buona franchisees use when preparing financial statements?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
s taxes collected from customers and actually paid to the appropriate taxing authority.
IV. ACCOUNTING AND RECORDS
- 4.1 Maintenance and Retention of Books and Records; Designated Accounting Services. During the Term, Franchisee shall maintain and preserve complete and accurate books, records and accounts in accordance with U.S. Generally Accepted Accounting Principles and in the form and the manner prescribed by Franchisor from time to time in the Manuals or otherwise in writing, which may include the use of designated software or a web-based platform, standard chart of accounts, and specified reporting periods for uniformity throughout the franchise system, and Franchisor access to financial data. Franchisee agrees to elect a fiscal year the same as Franchisor's fiscal year. During the first twelve (12) months of operation, Franchisee is required to engage and use an accounting service designated by Franchisor for preparation of financial statements and financial reporting. After the first twelve (12) months of operation, if at any time Franchisee is not in full compliance with the requirements of this Section VI., Franchisor can, by delivery of written notice, require Franchisee to once again engage and use the services of an accounting service designated by Franchisor.
- 4.2 Royalty Reports. The parties acknowledge and agree that Franchisor shall have full access to Franchisee's point-of-sale system, back of house software and any other systems, software or applications as may be used by Franchisee in operating the Franchised Business in the future to retrieve Gross Sales, financial data and other information relating to the Franchised Business. Franchisor shall provide a weekly Gross Sales report to Franchisee based on the information retrieved upon which Franchisee shall pay royalties. Franchisor reserves the right to change the manner in which Gross Sales reports are prepared in the future.
- 4.3 Period and Quarterly Statements.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees must adhere to specific accounting practices. During the franchise term, franchisees are required to maintain complete and accurate books, records, and accounts in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These records must be kept in the form and manner prescribed by Buona, which may include using designated software or a web-based platform, a standard chart of accounts, and specified reporting periods to ensure uniformity throughout the franchise system. Buona also requires access to franchisees' financial data.
To further standardize financial reporting, Buona franchisees must elect a fiscal year that aligns with Buona's fiscal year. During the first 12 months of operation, franchisees are required to engage and use an accounting service designated by Buona for the preparation of financial statements and financial reporting.
Franchisees are obligated to submit unaudited financial statements for the preceding period and fiscal year, along with a certificate confirming the accuracy of the statements. These financial statements must include both a profit and loss statement and a balance sheet. Additionally, franchisees must provide any other financial statements and tax returns within 15 days of receiving a written request from Buona. If a franchisee defaults on the agreement, Buona can demand that all subsequent financial statements include a "Review Report" prepared by an independent Certified Public Accountant (CPA).