Are there any notes to the financial statements for Chop5 Salad Kitchen?
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.
Use of Estimates
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 50)
What This Means (2024 FDD)
According to the 2024 Chop5 Salad Kitchen Franchise Disclosure Document, the financial statements do include notes. These notes provide additional context and details about the company's financial position and accounting practices.
The notes cover various aspects, including the nature of the business, its accounting policies, and specific financial statement items. For example, the notes explain that CHOP5 Franchise LLC was formed in Kentucky on March 22, 2019, and grants franchises for CHOP5 Salad Kitchen restaurants. The notes also detail the relationships between CHOP5 Franchise LLC and its parent company, Chop5 LLC, as well as its affiliates like Chop5 Polaris LLC, CHOP5 IP LLC, Chop5 Orlando UCF, LLC, and Chop5 JV Boulder LLC.
Furthermore, the notes discuss the company's accounting policies related to the use of estimates, cash and cash equivalents, accounts receivable, property, plant & equipment, intangible assets, and revenue recognition. These disclosures are essential for a prospective franchisee to understand how Chop5 Salad Kitchen reports its financial performance and what assumptions underlie those reports. The notes also address income taxes, including the company's adoption of ASC 740-10-25-6 regarding uncertain tax positions.
Overall, the notes to the financial statements offer a deeper understanding of Chop5 Salad Kitchen's financial operations and should be carefully reviewed by potential franchisees to assess the financial health and stability of the franchise opportunity.