Are the financial statements for Chick Fil A presented on a consolidated basis?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
Exhibit "C" to this Disclosure Document includes (i) the audited consolidated financial statements of Chick-fil-A, Inc. and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2024 and 2023 and the related consolidated statements of comprehensive earnings, of stockholders' equity and of cash flows for each of the three years (2024, 2023, and 2022) in the period ended December 31, 2024.
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP"). The accompanying consolidated financial statements include the accounts of Chick-fil-A, Inc. and our wholly owned subsidiaries. Investments in other entities where we do not have a controlling financial interest, but where we exert significant influence are accounted for in our consolidated financial statements using the equity method of accounting. See Note 11 for additional information regarding the Company's equity method investments. All intercompany balances and transactions have been eliminated in consolidation.
We have audited the accompanying consolidated financial statements of Chick-fil-A, Inc. and its subsidiaries (the "Company"), which comprise the consolidated balance sheets as of December 31, 2024 and 2023, and the related consolidated statements of comprehensive earnings, stockholders' equity and cash flows for the three years then ended, including the related notes (collectively referred to as the "consolidated financial statements").
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company 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.
Source: Item 21 — Financial Statements (FDD page 102)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the financial statements are indeed presented on a consolidated basis. The FDD includes the audited consolidated financial statements of Chick-fil-A, Inc. and its subsidiaries. These consolidated statements comprise the balance sheets as of December 31, 2024 and 2023, along with statements of comprehensive earnings, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2024.
The principle of consolidation means that the financial results of Chick Fil A and its wholly-owned subsidiaries are combined into one overall report, giving a comprehensive view of the company's financial position. This approach eliminates intercompany balances and transactions, providing a clearer picture of the entire organization's financial health. Investments in other entities where Chick Fil A exerts significant influence but does not have a controlling financial interest are accounted for using the equity method.
The report from the independent auditors confirms that they have audited the consolidated financial statements of Chick-fil-A, Inc. and its subsidiaries. Their opinion is that these statements present fairly the financial position of the company as of December 31, 2024 and 2023, and the results of its operations and cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States of America. This provides assurance to potential franchisees that the financial information presented is reliable and has been thoroughly vetted.
For a prospective franchisee, the consolidated financial statements offer a broad understanding of Chick Fil A's financial performance and stability. This is a standard practice for large franchisors with multiple subsidiaries, as it provides a more accurate and complete financial picture than separate statements would. Understanding these consolidated statements is crucial for assessing the overall financial health of Chick Fil A and its ability to support its franchisees.