Under what conditions might Chop5 Salad Kitchen require consolidated financial statements from a franchisee?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
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. You must send us a copy of any required financial statements upon request. You hereby authorize us to disclose Operational Data to prospective franchisees, Governmental Authorities and other Persons for any reasonable business purpose, provided the disclosure is not prohibited by applicable Law.
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 them to provide consolidated financial statements. These statements should reflect the financial condition and operations of all restaurants owned by the franchisee and their affiliates.
These financial statements must be verified and signed by the franchisee, certifying that the information is true, complete, and accurate. They must also be prepared on an accrual basis in compliance with Generally Accepted Accounting Principles (GAAP) and submitted in any format that Chop5 Salad Kitchen reasonably requires.
Additionally, Chop5 Salad Kitchen may require that the franchisee's annual financial statements be reviewed or audited by a certified public accountant if the franchisee submits materially inaccurate financial statements on a prior occasion. The franchisee is obligated to send Chop5 Salad Kitchen a copy of any required financial statements upon request.