Can Clean Your Dirty Face be required to have audited financial statements prepared annually?

According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, Clean Your Dirty Face may require franchisees to have audited financial statements prepared annually during the term of the Franchise Agreement. This means that as a franchisee, you might need to engage a certified public accountant to conduct a thorough review of your financial records each year, ensuring accuracy and compliance with accounting standards.

This requirement can have significant financial implications for a prospective Clean Your Dirty Face franchisee. Audited financial statements can be costly, as they involve a detailed examination by an independent accounting firm. The franchisee will bear the expense of these audits. However, these statements provide a high level of assurance regarding the financial health of the franchise, which can be beneficial for securing loans or attracting investors.

While Clean Your Dirty Face has the right to request these audited statements, it is important for potential franchisees to understand the specific circumstances under which these audits would be required. It would be prudent to discuss with Clean Your Dirty Face the criteria or triggers that would necessitate an audit, such as consistent underperformance or suspected financial irregularities. Understanding these conditions upfront can help a franchisee prepare for and manage the potential costs and administrative burdens associated with annual audits.

In the franchise industry, it is not uncommon for franchisors to reserve the right to request audited financial statements, particularly if there are concerns about a franchisee's financial performance or compliance. However, the frequency and conditions for requiring such audits can vary significantly. Therefore, prospective Clean Your Dirty Face franchisees should carefully review the Franchise Agreement and seek clarification from the franchisor to fully understand their obligations.