Who must prepare the annual financial statements for a Cordova franchise?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
THESE FINANCIAL STATEMENTS ARE PREPARED WITHOUT AN AUDIT. PROSPECTIVE FRANCHISEES OR SELLERS OF FRANCHISES SHOULD BE ADVISED THAT NO CERTIFIED PUBLIC ACCOUNTANT HAD AUDITED THESE FIGURES OR EXPRESSED HIS/HER OPINION WITH REGARD TO THE CONTENT OR FORM.
Source: Item 23 — RECEIPTS (FDD pages 44–195)
What This Means (2025 FDD)
The 2025 Cordova FDD includes a balance sheet as an example of a financial statement. The balance sheet included in Exhibit D of the FDD was not audited. Cordova advises prospective franchisees that no Certified Public Accountant has audited these figures or expressed an opinion on their content or form.
The FDD does not specify who is responsible for preparing the annual financial statements for a Cordova franchise. It is common practice for franchisors to require franchisees to submit regular financial reports, often prepared according to a specific accounting method. These reports allow the franchisor to monitor the franchisee's performance and ensure compliance with financial obligations outlined in the franchise agreement.
Because the FDD does not specify who is responsible for preparing the annual financial statements for a Cordova franchise, prospective franchisees should ask Cordova about the specific requirements for financial reporting, including who is authorized or required to prepare these statements, the frequency of reporting, and the accounting standards that must be followed. Understanding these requirements is essential for managing the financial aspects of the franchise and maintaining a good relationship with Cordova.