On what basis must Chop5 Salad Kitchen financial statements be prepared?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
mat we prescribe, including, without limitation: (a) monthly financial statements, which are due no later than 20 days after the end of each month; (b) quarterly financial statements, which are due no later than 60 days after the end of each calendar quarter; and (c) annual financial statements, which are due no later than 90 days after the end of each calendar year. If you own multiple Restaurants, we may require you to provide consolidated financial statements reflecting the financial condition and operations of all Restaurants owned by you and your affiliates. In addition to any other requirements described in the Manual, all financial statements must be: (a) verified and signed by you certifying to us that the information is true, complete, and accurate; (b) prepared on an accrual basis in compliance with Generally Accepted Accounting Principles; and (c) submitted in any format we reasonably require. We may require that your annual financial
statements be reviewed or audited by a certified public accountant if you submit materially inaccurate financial statements on a prior occasion.
Source: Item 23 — RECEIPT (FDD pages 50–178)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, if a franchisee owns multiple Chop5 Salad Kitchen restaurants, the franchisor may require consolidated financial statements. These statements must reflect the financial condition and operations of all restaurants owned by the franchisee and their affiliates.
All financial statements provided to Chop5 Salad Kitchen must be verified and signed by the franchisee, certifying that the information is true, complete, and accurate. Furthermore, these financial statements must be prepared on an accrual basis, adhering to Generally Accepted Accounting Principles (GAAP). The statements should also be submitted in a format that Chop5 Salad Kitchen reasonably requires.
Chop5 Salad Kitchen retains the right to request that a franchisee's annual financial statements be reviewed or audited by a certified public accountant if the franchisee has previously submitted materially inaccurate financial statements. The franchisee is obligated to provide copies of any required financial statements upon request. Chop5 Salad Kitchen is also authorized to disclose operational data to prospective franchisees, governmental authorities, and other persons for reasonable business purposes, provided that such disclosure is not prohibited by applicable law.