When preparing Crave Cookies' financial statements, what must management evaluate regarding the company's ability to continue as a going concern?

According to Crave Cookies' 2025 Franchise Disclosure Document, when preparing financial statements, the company's management must evaluate whether there are conditions or events that, when considered in total, raise significant doubt about the company's ability to continue operating as a going concern. This evaluation must consider the company's ability to continue as a going concern within one year after the date the financial statements are available to be issued. This is a standard accounting practice.

This evaluation is a critical part of preparing financial statements in accordance with accounting principles generally accepted in the United States of America. It ensures that the financial statements provide an accurate and reliable representation of the company's financial position and performance. If substantial doubt exists, it may affect the valuation of assets and liabilities, as well as the disclosures made in the financial statements.

For a prospective Crave Cookies franchisee, this means that the franchisor's financial statements should be reviewed carefully to assess the franchisor's financial health and stability. If there are any disclosures about conditions or events that raise substantial doubt about the company's ability to continue as a going concern, this could be a red flag. It would be prudent to seek professional financial advice to fully understand the implications before investing in a Crave Cookies franchise.