What is the name of the rule that Chatime references regarding financial statements?

According to Chatime's 2025 Franchise Disclosure Document, the company adheres to accounting principles generally accepted in the United States of America, also known as U.S. GAAP, when preparing its financial statements. This is explicitly stated in Note 2, which outlines the summary of significant accounting policies.

Chatime's financial statements, including the balance sheets, statements of operations, member's equity (deficit), and cash flows, are prepared on an accrual basis in accordance with U.S. GAAP. This means that revenues and expenses are recognized when they are earned or incurred, regardless of when cash changes hands. This accounting method provides a more accurate picture of the company's financial performance over time.

Furthermore, the management of Chatime is responsible for ensuring that these financial statements are presented fairly and in accordance with U.S. GAAP. This includes the design, implementation, and maintenance of internal controls to prevent material misstatements, whether due to fraud or error. The company's adherence to U.S. GAAP ensures transparency and comparability, which is crucial for potential franchisees evaluating the financial health and stability of the Chatime franchise system.