Can Cinnaholic require a franchisee to provide audited annual statements, and who bears the expense?

According to Cinnaholic's 2025 Franchise Disclosure Document, Cinnaholic has the right to require franchisees to provide audited annual financial statements. These statements must be in a form that Cinnaholic finds satisfactory and include a statement of income and retained earnings, a statement of cash flows, and a balance sheet for the franchisee's fiscal year.

If a Cinnaholic franchisee does not typically obtain financial statements compiled or reviewed by an independent certified public accountant, they can 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.

Importantly, if Cinnaholic exercises its right to require audited annual statements, the franchisee is responsible for covering the expense of these audits. This means that franchisees should factor in the potential cost of these audits when considering the financial obligations of owning a Cinnaholic franchise.