What happens to intercompany accounts and transactions in the consolidated financial statements for Carbones Pizzeria?

According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the company's consolidated financial statements include M & T Pizza Incorporated and its wholly-owned subsidiaries, Carbone & Sons, Inc., and Carbone Pizza, Inc. When these entities are combined for financial reporting, any transactions or account balances between them are eliminated.

In practical terms, this means that any money owed between these related companies, or any sales or services they provide to each other, are not counted in the final, consolidated financial statements. This is a standard accounting practice to prevent inflating the financial picture of the overall organization. For example, if one subsidiary charges another a $1,000 management fee, that $1,000 is removed from both the expense and revenue sides of the consolidated income statement.

For a prospective Carbones Pizzeria franchisee, this consolidation and elimination of intercompany transactions provides a clearer view of the true financial performance of the overall Carbones Pizzeria organization, without the potential distortion of internal transactions. This is a common and accepted accounting practice.