What specific financial statement does Chocolate Fish Coffee include in Exhibit D?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
| We have not been in business for three years or more, and therefore cannot include | |
|---|---|
| all financial statements required by the Franchise Rule of the Federal Trade Commission. | |
| Exhibit D contains our audited opening balance sheet dated December 31st, 2023. Our fiscal year | |
| end is December 31. |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 41)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, because the company has not been in business for at least three years, it cannot include all financial statements typically required by the FTC's Franchise Rule. Instead, Exhibit D contains Chocolate Fish Coffee's audited opening balance sheet dated December 31st, 2023. The company's fiscal year ends on December 31.
This means that prospective franchisees will only have access to the balance sheet to assess the financial health of Chocolate Fish Coffee. A balance sheet provides a snapshot of a company's assets, liabilities, and equity at a specific point in time. It does not show the company's performance over a period, like an income statement or cash flow statement would.
Given the limited financial information, it is crucial for potential Chocolate Fish Coffee franchisees to conduct thorough due diligence. This includes seeking professional financial advice, carefully reviewing the balance sheet, and asking the franchisor for additional financial information or explanations to fully understand the company's financial position and stability.