What is included in the definition of 'Financial Statements' for a Cost Cutters Family Hair Salon franchise?
Cost_Cutters_Family_Hair_Salon Franchise · 2024 FDDAnswer from 2024 FDD Document
f this Agreement.
ARTICLE 19 FINANCIAL STATEMENTS; GROSS REVENUE REPORTS; FORMS AND ACCOUNTING
- 19.1 QUARTERLY AND ANNUAL FINANCIAL STATEMENTS. The FRANCHISEE will, at its expense, provide COST CUTTERS with a quarterly balance sheet and income statement, and annual financial statements for the FRANCHISEE'S Cost Cutters Business which will consist of a balance sheet, income statement, statement of cash flows and explanatory footnotes. All financial statements provided to COST CUTTERS for the FRANCHISEE'S Cost Cutters Business will be presented in the exact form and format prescribed by COST CUTTERS in writing and will be categorized according to the chart of accounts prescribed by COST CUTTERS. The FRANCHISEE'S financial statements will be prepared in accordance with generally accepted accounting principles applied on a consistent basis. If the FRANCHISEE'S annual financial statements are not audited by an independent certified public accountant, then the FRANCHISEE'S annual financial statements must be certified in writing as accurate by the FRANCHISEE'S President or Chief Financial Officer, or if the FRANCHISEE is not a corporation, then by the FRANCHISEE'S Managing Partner, Chief Operating Officer or Chief Financial Officer. The FRANCHISEE'S quarterly financial statements will be delivered to COST CUTTERS by the FRANCHISEE within thirty (30) days after the end of the quarter and the annual financial statements will be delivered within ninety (90) days of the FRANCHISEE'S fiscal year end.
- 19.2 TAX RETURNS. Within ninety (90) days after the FRANCHISEE'S fiscal year end, the FRANCHISEE will furnish COST CUTTERS with signed copies of the FRANCHISEE'S annual federal, and if applicable, state income tax returns, and copies of any other federal, state or local tax returns filed by the FRANCHISEE including, but not limited to, any amended tax returns filed by the FRANCHISEE, together with proof that the FRANCHISEE has paid all federal and state income and sales taxes due.
- 19.3 WEEKLY STATEMENT OF GROSS REVENUES. The FRANCHISEE will maintain an accurate electronic and/or written record of daily Gross
Source: Item 23 — RECEIPT (FDD pages 76–439)
What This Means (2024 FDD)
According to the 2024 Cost Cutters Family Hair Salon Franchise Disclosure Document, franchisees are required to adhere to specific guidelines regarding their financial statements. These statements must be prepared following generally accepted accounting principles, applied consistently.
If a franchisee's annual financial statements are not audited by an independent certified public accountant, the President, Chief Financial Officer, Managing Partner, or Chief Operating Officer must certify the accuracy of the statements in writing. Franchisees must deliver quarterly financial statements to Cost Cutters Family Hair Salon within 30 days after the quarter's end, and annual statements within 90 days of the franchisee's fiscal year end.
In addition to financial statements, franchisees must furnish Cost Cutters Family Hair Salon with signed copies of their annual federal and state income tax returns (if applicable) within 90 days after their fiscal year end, along with proof of payment for all federal, state, and local taxes due. Franchisees must also maintain accurate daily records of Gross Revenues and remit weekly statements of Gross Revenues, certified as accurate, using prescribed forms. These weekly statements must accompany Continuing Fees and Advertising Fees and be provided to Cost Cutters Family Hair Salon by Wednesday of each week for the preceding week. Failure to deliver weekly Gross Revenues statements on time may result in a $100 late fee for each instance.