What kind of financial reports must a Cinnaholic franchisee provide to the franchisor?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
isee hereby expressly permits Franchisor to disclose any such information to potential purchasers (and their employees, agents, and representatives) of Franchisor in connection with the sale or transfer of any equity interests or assets of Franchisor or any merger, reorganization or similar restructuring of Franchisor.
- 6.2. Reporting. Franchisee must provide Franchisor with those financial reports required by Franchisor from time to time. All such reports shall be prepared (i) using any form documents established by Franchisor as set forth in the Operations Manual or otherwise and (ii) in accordance with the generally accepted accounting principles of the United States, to the extent applicable. Franchisee's current reporting obligations include the following:
- (i) A statement of relevant Gross Sales in the form required by Franchisor to be delivered with each payment of the Royalty Fee and Advertising Fee no later than 5:00 p.m. on each Tuesday;
- (ii) A monthly unaudited balance sheet and profit and loss statement in a form satisfactory to Franchisor covering Franchisee's business for the prior month and fiscal year to date, all of which shall be certified by Franchisee as true and correct and delivered to Franchisor no later than the 21st day of each month;
- (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;
- (iv) An annual copy of Franchisee's signed 1120 or 1120S tax form (including all supporting schedules) as filed with the Internal Revenue Service (or any forms which take the place of those forms), and all other federal, state and local sales and use and income tax reports Franchisee is required to file, all to be delivered within 30 days after filing;
- (v) A statement of local advertising expenditures made pursuant to Section 11.3 below for each calendar quarter and fiscal year to date, in a form satisfactory to Franchisor, along with invoices documenting such expenditures (if required by Franchisor), to be delivered within 15 days after the end of each calendar quarter;
- (vi) Insurance certificates upon the annual renewal of the policies and all health and safety inspection reports; and
- (vii) Any other data, information and supporting records reasonably requested by Franchisor, including account login and password information for any delivery service applications, social media sites or other electronic media.
All reports or other information required to be submitted under this Section 6.2 shall be submitted to the attention of Franchisor's franchise department. If any of the reports or other information required to be given to Franchisor in accordance with this Section are not received by Franchisor by the required deadline, Franchisor may charge Franchisee a late submission fee equal to $100.00.
6.3. Audit.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees must provide several financial reports to the franchisor. These reports must be prepared using forms established by Cinnaholic and follow generally accepted accounting principles.
The specific reports include a statement of relevant Gross Sales, which must be delivered with each Royalty Fee and Advertising Fee payment by 5:00 p.m. every Tuesday. Franchisees must also submit monthly unaudited balance sheets and profit and loss statements covering the prior month and fiscal year to date, certified as true and correct, by the 21st day of each month.
Additionally, Cinnaholic requires annual financial statements compiled or reviewed by an independent certified public accountant. These statements must include a statement of income and retained earnings, a statement of cash flows, and a balance sheet for the fiscal year. However, if a franchisee does not typically obtain these statements, they may provide internally prepared financial statements certified by the franchisee or their principal executive officer or chief financial officer. Cinnaholic retains the right to require audited annual statements at the franchisee's expense. Franchisees must also provide an annual copy of their signed 1120 or 1120S tax form (including all supporting schedules) as filed with the IRS, along with all other federal, state, and local sales, use, and income tax reports within 30 days after filing.
Furthermore, franchisees must submit a statement of local advertising expenditures for each calendar quarter and fiscal year to date, along with supporting invoices if required by Cinnaholic, within 15 days after the end of each calendar quarter. They must also provide insurance certificates upon annual policy renewal and all health and safety inspection reports. Finally, franchisees must supply any other data, information, and supporting records reasonably requested by Cinnaholic, including account login and password information for any delivery service applications, social media sites, or other electronic media. Failure to submit these reports by the required deadline may result in a late submission fee of $100.00.