How is the income of Crave Cookies taxed according to the financial statements?

According to the 2025 Crave Cookies FDD, the company's financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. This means that Crave Cookies's management makes estimates and assumptions that could affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from these estimates. The company's financial statements include a balance sheet, statements of income, members' equity, and cash flows. These statements are audited by independent accountants.

For the years 2023 and 2022, Crave Cookies recorded credit loss expenses of $5,000 and $0, respectively, related to doubtful accounts receivable where collectability is not reasonably assured. This indicates that Crave Cookies recognizes potential losses from uncollectible accounts. The company's accounting policies also state that they do not generally charge interest on past due accounts, and delinquent receivables are written off based on individual credit evaluations and specific customer circumstances.

Crave Cookies's financial statements are audited to ensure they are free from material misstatement, whether due to fraud or error. The auditors provide an opinion on whether the financial statements present fairly the financial position, results of operations, and cash flows of the company in accordance with accounting principles generally accepted in the United States of America. This audit provides a level of assurance to potential franchisees that the financial information provided by Crave Cookies is reliable and accurate.