What is Buona's management required to evaluate when preparing financial statements regarding the company's ability to continue as a going concern?

According to Buona's 2025 Franchise Disclosure Document, when preparing financial statements, Buona's management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the company's ability to continue as a going concern within one year after the date that the financial statements are available to be issued. This evaluation is a standard accounting practice to ensure that the financial statements provide an accurate representation of the company's financial health and sustainability.

This requirement means that Buona's management must assess various factors that could impact the company's ability to operate and meet its obligations in the near term. These factors may include financial performance, market conditions, regulatory changes, and other potential risks. By considering these factors collectively, management can determine whether there is a significant risk that the company may not be able to continue operating for the next year.

The evaluation is crucial for prospective franchisees because it provides insight into the financial stability of Buona. If there are substantial doubts about Buona's ability to continue as a going concern, it could indicate potential risks for franchisees, such as reduced support from the franchisor, difficulties in maintaining brand standards, or even the franchisor's inability to fulfill its obligations under the franchise agreement. Therefore, understanding this evaluation process is an important part of a franchisee's due diligence.

It is important to note that the independent auditor also has responsibilities related to the financial statements, as detailed in the 'Auditors' Responsibilities for the Audit of the Financial Statements' section of the report. While management prepares the statements and evaluates the going concern, the auditor provides an independent opinion on whether those statements present fairly the financial position of Buona.