What is Crave management's responsibility regarding internal controls for financial statement preparation?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after March 24, 2025.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, management is responsible for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements. This ensures the statements are free from material misstatement, whether due to fraud or error. This responsibility is in accordance with accounting principles generally accepted in the United States of America.
Specifically, Crave's management must evaluate whether conditions or events, considered in the aggregate, raise substantial doubt about the company's ability to continue as a going concern for one year after March 24, 2025. This assessment is a critical component of their financial oversight duties.
In practical terms, this means Crave's management must establish and maintain a system of internal controls to accurately record and report financial data. These controls help prevent errors and fraud, ensuring the reliability of the financial statements presented to potential franchisees and other stakeholders. Prospective franchisees should understand that the franchisor's financial stability and reporting practices are closely tied to these internal controls.