Does the Chop5 Salad Kitchen FDD include pro forma financial statements?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 50)
What This Means (2024 FDD)
The 2024 Chop5 Salad Kitchen FDD does not explicitly state whether pro forma financial statements are included. While Item 23 is titled "RECEIPT", the provided excerpts consist of definitions, notes to financial statements, and general company information.
Specifically, the notes to financial statements mention that Chop5 Franchise LLC was formed in March 2019 and, as of the document's writing, had not yet commenced franchising activities, sold any franchises, earned any revenue, or incurred any expenses. This suggests that detailed financial projections or pro forma statements might not be available, given the company's early stage and lack of operational history at the time of the FDD's creation.
A prospective Chop5 Salad Kitchen franchisee should directly ask the franchisor whether pro forma financial statements or earnings projections are available. If not, they should request detailed information on the financial performance of existing company-owned or affiliate-owned Chop5 Salad Kitchen restaurants to develop their own financial forecasts.