What is the purpose of including financial statements in the Chatime FDD?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
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INDEPENDENT AUDITOR'S REPORT
To the Member Chatime Franchise LLC
Opinion
We have audited the accompanying financial statements of Chatime Franchise LLC (a limited liability company) which comprise the balance sheets as of December 31, 2024 and 2023, and the related statements of operations and member's equity (deficit) and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Chatime Franchise LLC as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Chatime Franchise LLC and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.
Source: Item 21 — Financial Statements (FDD page 58)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the inclusion of financial statements is to provide prospective franchisees with a clear and fair representation of the company's financial position. The financial statements, which include balance sheets as of December 31, 2024 and 2023, statements of operations and member's equity (deficit), and cash flow statements for the years then ended, are prepared in accordance with accounting principles generally accepted in the United States of America.
An independent auditor has audited these financial statements and has issued an opinion that they present fairly, in all material respects, the financial position of Chatime. The auditor's report confirms that the audit was conducted according to generally accepted auditing standards, ensuring that the financial statements are free from material misstatement, whether due to fraud or error. This audit provides a level of assurance to potential franchisees, although it is not a guarantee against all misstatements.
Management is responsible for the preparation and fair presentation of these financial statements, including the implementation and maintenance of internal controls. They must also evaluate Chatime's ability to continue as a going concern. The auditor's responsibilities include exercising professional judgment, assessing risks of material misstatement, and evaluating the appropriateness of accounting policies and estimates. This rigorous process aims to give prospective franchisees confidence in the financial health and stability of Chatime, helping them make informed investment decisions.