Do the Crave Cookies financial statements include any disclaimers?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
See accompanying notes and independent accountants' audit report
Notes to the Financial Statements
Note 1 - Organization and Summary of Significant Accounting Policies
Organization - Crave Cookies Franchising, LLC (the Company) formed on February 15, 2021 under the laws of the state of Utah as a Utah corporation.
The Company is a franchise company for Crave Cookies locations. The Company grants franchisees the right to operate a physical storefront location using the Crave Cookies name and marks.
Use of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Concentrations of Credit Risk - Financial instruments which potentially subject the Company to concentration of credit risk consist primarily of receivables. In the normal course of business, the Company provides credit terms to its customers. Accordingly, the Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses which, when realized, have been within the range of management's expectations.
The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk with respect to cash and cash equivalents. As of December 31, 2024 the Company did not have cash balances over the federally insured limit.
Cash and Cash Equivalents - For purposes of the statement of cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalents.
Contract receivables - accounts receivable are stated at the amount of consideration from customers of which the Company has an unconditional right to receive. The Company provides an allowance for credit losses, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. As of December 31, 2024, there was no allowance for credit losses recorded.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the financial statements include disclaimers within the notes and the independent auditor's report. Specifically, the notes to the financial statements contain a "Use of Estimates" disclaimer, which states that the preparation of financial statements requires management to make estimates and assumptions that could affect the reported amounts of assets, liabilities, revenues, and expenses. The disclaimer clarifies that actual results could differ from those estimates. This is a standard disclaimer reflecting the inherent uncertainty in financial reporting.
Additionally, the Independent Auditor's Report includes a disclaimer outlining the auditor's responsibilities and the scope of their audit. The auditor's disclaimer states that their audit was conducted in accordance with auditing standards generally accepted in the United States of America (GAAS). While the auditor aims to obtain reasonable assurance that the financial statements are free from material misstatement, they clarify that reasonable assurance is not absolute, and there's a risk that a material misstatement may not always be detected, especially if it results from fraud.
These disclaimers are typical in audited financial statements and serve to inform the reader about the limitations of the audit and the financial statements themselves. For a potential Crave Cookies franchisee, these disclaimers highlight the importance of understanding the estimates and assumptions used in preparing the financial statements and the inherent limitations of relying solely on audited financials for making investment decisions. It would be prudent for a prospective franchisee to carefully review these notes and consult with a financial advisor to fully understand their implications.