What factors does Carbones Pizzeria consider when evaluating its estimates and assumptions?

According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the company evaluates its estimates and assumptions based on historical experience and various other factors that are believed to be reasonable under the circumstances. This evaluation is an ongoing process. The estimates and assumptions made by management affect the reported amounts in the financial statements and related disclosures. These statements are prepared following accounting principles generally accepted in the United States of America (US GAAP).

For the year ended October 31, 2022, significant estimates made by Carbones Pizzeria include the allowance for doubtful accounts and the tax valuation allowance. Actual results could differ from those estimates. This means that the financial performance represented in the FDD is based on management's best judgment at the time, but future outcomes could vary.

This approach is typical in financial reporting, as many figures cannot be known with certainty in advance. Prospective Carbones Pizzeria franchisees should understand that the financial statements are based on these estimates and assumptions, and actual results may differ. It would be prudent for potential franchisees to discuss these estimates and assumptions with Carbones Pizzeria to gain a better understanding of their potential impact.