What specific financial statements must be included in the annual financial statements provided by a Cinnaholic franchisee?
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 provide annual financial statements compiled or reviewed by an independent certified public accountant. These statements must be in a format that Cinnaholic finds satisfactory.
The specific financial statements that must be included are a statement of income and retained earnings, a statement of cash flows, and a balance sheet. All of these statements must be for the franchisee's fiscal year that has just ended.
If a Cinnaholic franchisee does not typically obtain financial statements compiled or reviewed by an independent certified public accountant, they may provide internally prepared financial statements. However, 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. Cinnaholic retains the right to require audited annual statements at any time, at the franchisee's expense.