When preparing Camp Margaritaville's financial statements, what is management required to evaluate regarding the company's ability to continue as a going concern?

According to Camp Margaritaville's 2025 Franchise Disclosure Document, when preparing the financial statements, 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 for one year after the date that the financial statements are available to be issued.

This evaluation is a standard accounting practice, ensuring that the financial statements provide a realistic view of Camp Margaritaville's financial health. It means that management must assess all known factors that could impact the company's ability to operate for the next year.

For a prospective franchisee, this indicates that Camp Margaritaville's financial statements are prepared with consideration of its long-term viability. This assessment provides a level of assurance that the company is expected to remain operational, which is a critical factor when investing in a franchise. Franchisees should review these statements and any related auditor's notes carefully to understand any potential risks identified in the going concern evaluation.