What is management required to evaluate regarding the C12 Group's ability to continue as a going concern?

According to the 2025 FDD, C12 Group's management is responsible for evaluating the company's ability to continue as a going concern. This evaluation involves determining whether there are conditions or events that, when considered together, raise significant doubt about the company's ability to continue operating for at least one year after the financial statements are issued. This assessment is a standard accounting practice, ensuring that the financial statements provide a realistic view of the company's financial health and sustainability.

For a prospective C12 Group franchisee, this requirement indicates that the franchisor's financial stability is regularly scrutinized. The evaluation considers various factors that could impact the company's ability to sustain operations, providing stakeholders, including potential franchisees, with a degree of confidence in the franchisor's long-term viability. This also aligns with standard auditing practices, where independent auditors also assess the appropriateness of management's use of the going concern assumption.

The auditor's report included in the FDD reflects this process, detailing the auditor's responsibilities to evaluate the appropriateness of accounting policies and the reasonableness of significant accounting estimates made by management. The auditor must also conclude whether there is substantial doubt about C12 Group's ability to continue as a going concern. This independent assessment provides an additional layer of assurance regarding the franchisor's financial health.

In summary, the going concern evaluation is a critical component of financial reporting, ensuring transparency and accountability. For potential C12 Group franchisees, this requirement offers some reassurance that the franchisor's financial stability is regularly assessed by both management and independent auditors, which is a positive indicator of a sustainable franchise system.