What specific financial statement is included in the Chocolate Fish Coffee FDD as Exhibit D?

According to the 2024 Chocolate Fish Coffee FDD, because the company has not been in business for three years or more, it cannot include all financial statements typically required by the Franchise Rule of the Federal Trade Commission. 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.

The inclusion of an audited opening balance sheet provides a snapshot of the company's assets, liabilities, and equity at a specific point in time. This statement is prepared in accordance with accounting principles generally accepted in the United States of America. The audit report included with the balance sheet expresses the independent accountant's opinion on the fairness of the presentation of the company's financial position as of that date.

Prospective franchisees should review this balance sheet carefully to understand the financial health and stability of Chocolate Fish Coffee. While it does not provide a comprehensive view of the company's financial performance over time, it offers insights into its initial capitalization and financial structure. It is important to note that because Chocolate Fish Coffee has not been in business for three years, the FDD does not include the full set of financial statements that would typically be required, such as income statements, statements of cash flow, and statements of changes in equity for the past three years.