Under what circumstances must a Craters & Freighters franchisee submit monthly or quarterly financial statements?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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 must submit monthly or quarterly financial statements if requested by Craters & Freighters. This is part of the general accounting and reporting requirements outlined in the franchise agreement.
Specifically, Craters & Freighters requires franchisees to maintain accurate records and financial bookkeeping for their franchised business, as mandated by law and the franchise agreement. Each month, franchisees must submit a report on their Adjusted Gross Sales and insurance activities. These reports are due by the tenth day of the following month, unless Craters & Freighters requires royalty or insurance payments on a weekly basis, in which case the report deadline will be adjusted accordingly.
In addition to the monthly reports, franchisees must also provide an annual balance sheet and profit and loss statement within 90 days after the end of their fiscal year. Furthermore, franchisees are obligated to submit copies of federal and state income, sales, and other tax returns within ten days of filing, should Craters & Freighters request them. These requirements ensure that Craters & Freighters has access to the financial information necessary to monitor the performance and compliance of its franchisees.