Is a Craters & Freighters franchisee required to submit financial statements upon request?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
11. ACCOUNTING, REPORTS, AND RECORDS
- 11.1 Accounting and Reports. Franchisee must keep accurate records and financial bookkeeping regarding the operations of the Franchised Business as required by law and by Franchisor in accordance with this Agreement, the Operations Manuals, and otherwise. Specifically, Franchisee must perform all of the following:
- 11.1.1 On or before the tenth (10th) day of each calendar month, Franchisee must submit, and Franchisor must have received, a report on the Franchised Business's Adjusted Gross Sales for the preceding calendar month in the form then required by Franchisor. In the event Franchisor requires Franchisee to pay the Royalty Fee on a weekly basis, Franchisee must submit, and Franchisor must receive, such report by the deadline then established by Franchisor.
- 11.1.2 On or before the tenth (10th) day of each calendar month, Franchisee must submit, and Franchisor must have received, a report on the Franchised Business's insurance activities for the preceding calendar month in the form then required by Franchisor. In the event Franchisor requires Franchisee to pay the Insurance Payment on a weekly basis, Franchisee must submit, and Franchisor must receive, such report by the deadline then established by Franchisor.
- 11.1.3 Upon request by Franchisor, Franchisee must promptly submit to Franchisor monthly or quarterly financial statements.
- 11.1.4 On or before the ninetieth (90th) day after the end of each fiscal year of Franchisee, Franchisee must submit to Franchisor a balance sheet and profit and loss statement for such fiscal year.
- 11.1.5 Upon request of Franchisor, within ten (10) days after such returns are filed, exact copies of federal and state income, sales and any other tax returns, and such other forms, records, books, and other information as Franchisor may periodically require.
- 11.1.6 Any other report required by Franchisor relating to the Franchised Business.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, franchisees are required to maintain accurate records and financial bookkeeping for their franchised business, as mandated by law and the franchise agreement. Specifically, Craters & Freighters franchisees must submit a report on their Adjusted Gross Sales for the preceding calendar month on or before the tenth day of each month. They must also submit a report on the business's insurance activities for the preceding month by the same deadline.
In addition to the monthly reports, Craters & Freighters franchisees are obligated to provide financial statements to the franchisor. Upon request, franchisees must promptly submit monthly or quarterly financial statements. Furthermore, franchisees must submit a balance sheet and profit and loss statement for each fiscal year, no later than 90 days after the fiscal year's end.
Craters & Freighters franchisees are also required to provide copies of federal and state income, sales, and other tax returns within ten days of filing, if requested by the franchisor. They must also submit any other reports related to the franchised business that Craters & Freighters may require periodically. These requirements ensure that Craters & Freighters has access to the necessary financial information to monitor the performance and compliance of its franchisees.