Does the Chop5 Salad Kitchen FDD include balance sheets?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 23: RECEIPT]
CHOP5 FRANCHISE LLC NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CHOP5 Franchise LLC ("the Company") was formed on March 22, 2019, (Inception) in the State of Kentucky as a limited liability company. The Company grants franchises to qualified persons for the establishment and operations of a CHOP5 Salad Kitchen restaurant featuring made-to-order salads, salad and grain bowls, soups, and other healthy food options under the CHOP5 name and mark (each a "CHOP5 Salad Kitchen"). All activities are conducted in a designated territory.
Parent and Affiliates
The Company is wholly owned by Chop5 LLC ("Parent") that was organized in the State of Kentucky as a limited liability company on February 18, 2016.
Chop5 Polaris LLC was organized in Ohio as a limited liability company on April 2, 2019. Chop5 Polaris LLC has owned and operated a CHOP5 Salad Kitchen.
CHOP5 IP LLC, was organized in Delaware as a limited liability company on April 10, 2019. CHOP5 IP LLC owns the Proprietary Marks and other intellectual property, which it has licensed to the Company so the Company may sub-license them to the Company's franchisees.
Chop5 Orlando UCF, LLC, was organized in Florida as a limited liability company on September 16, 2019. Chop5 Orlando UCF, LLC opened a Chop5 Salad Kitchen in March 2022.
Chop5 JV Boulder LLC was organized in Colorado as a limited liability company on March 15, 2019. Chop5 JV Boulder LLC opened a Chop5 Salad Kitchen in December 2021. This location closed on February 19, 2023.
A summary of significant accounting policies follows:
Development Stage Operations
The Company's planned franchising activities, as previously described, have not yet commenced. Since its inception the Company has not sold any franchises, has not earned any revenue, and has incurred no expenses. The Company's activities are subject to significant risks and uncertainties, including failing to secure additional capital to fund operations until the Company achieves break-even operational status.
Use of Estimates
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 50)
What This Means (2024 FDD)
Based on the 2024 Chop5 Salad Kitchen FDD, while Item 23 is titled "RECEIPT" and includes "CHOP5 FRANCHISE LLC NOTES TO FINANCIAL STATEMENTS", the excerpt focuses on the nature of the business, its parent and affiliates, and accounting policies. Specifically, it mentions the company's formation in Kentucky on March 22, 2019, and its franchising activities. It also identifies Chop5 LLC as the parent company and details the formation and activities of affiliates like Chop5 Polaris LLC, CHOP5 IP LLC, Chop5 Orlando UCF, LLC, and Chop5 JV Boulder LLC.
The provided excerpt from Item 23 also describes the company's development stage operations, noting that it had not yet sold any franchises, earned revenue, or incurred expenses since its inception. It also mentions that the company's activities are subject to significant risks and uncertainties, including securing additional capital. The excerpt does not contain the actual balance sheets.
Therefore, while the FDD references financial statements and includes notes related to them, the provided excerpts do not contain the balance sheets themselves. A prospective franchisee should review the full Item 23 in the FDD to examine the balance sheets and other financial statements of Chop5 Salad Kitchen to fully understand the financial condition of the company.