What accounting standards are the Crave Franchising, LLC financial statements prepared under?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
4, 2023, and 2022, total capital distributions were $169,340, $483,344 and $446,770, respectively.
2. Summary of significant accounting policies and nature of operations
Basis of presentation
The Company prepares its financial statements on the accrual basis of accounting consistent with accounting principles generally accepted in the United States of America.
Use of estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the company prepares its financial statements on the accrual basis of accounting, consistent with accounting principles generally accepted in the United States of America. This is a standard practice, ensuring uniformity and comparability in financial reporting.
The use of these accounting principles requires Crave's management to make estimates and assumptions that could affect the reported amounts in their financial statements and accompanying notes. This means that while the financial statements aim to present a fair view, actual results could differ from these estimates. Franchisees should be aware that these estimates are part of the financial reporting process.
Furthermore, Crave recognizes revenue in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606, which provides a comprehensive model for accounting for revenue from contracts with customers. This involves a five-step model that includes identifying the contract, performance obligations, transaction price, allocating the price, and recognizing revenue as obligations are met. For a prospective franchisee, this means that Crave's revenue recognition is aligned with current accounting standards, providing a structured approach to how revenue from franchise fees and royalties is recorded and reported.