What must a Cinnaholic franchisee include in their annual financial statements?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- (iii) Annual financial statements compiled or reviewed by an independent certified public accountant in a form satisfactory to Franchisor, which shall include a statement of income and retained earnings, a statement of cash flows, and a balance sheet of Franchisee, all for the fiscal year then ended.
If Franchisee does not, in the ordinary course, obtain financial statements compiled or reviewed by an independent certified public accountant, then Franchisee may provide internally prepared financial statements which shall be certified as true and correct by Franchisee or Franchisee's principal executive officer or chief financial officer if Franchisee is a partnership, corporation or limited liability company.
Franchisor shall have the right at any time to require audited annual statements to be provided to it, at Franchisee's expense;
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees must submit annual financial statements that are either compiled or reviewed by an independent certified public accountant, in a format that Cinnaholic finds satisfactory. These statements must include a statement of income and retained earnings, a statement of cash flows, and a balance sheet for the franchisee's fiscal year.
However, if a Cinnaholic franchisee does not typically obtain financial statements compiled or reviewed by an independent certified public accountant, they have the option to provide internally prepared financial statements. These internally prepared statements must be certified as true and correct by the franchisee, or if the franchisee is a partnership, corporation, or limited liability company, by their principal executive officer or chief financial officer.
It's important to note that Cinnaholic retains the right to request audited annual statements from the franchisee at any time, and the franchisee would be responsible for covering the expense of such an audit. Franchisees should be prepared to provide these audited statements if requested. Failing to provide the required financial statements in a timely manner may result in a late submission fee.