Regarding Crave Cookies' financial statements, what is the potential impact of actual results differing from the estimates made?

According to Crave Cookies' 2025 Franchise Disclosure Document, the company's financial statements are prepared following accounting principles generally accepted in the United States of America. This requires the management of Crave Cookies to make estimates and assumptions that could affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during the reporting period.

The FDD emphasizes that these are estimates, and therefore, the actual results for Crave Cookies could differ from these estimates. This means that the financial picture presented in the FDD is based on management's best judgment but is not a guarantee of future performance. For example, the collectibility of accounts receivable is estimated based on historical data and current economic conditions, but actual defaults could be higher or lower.

For a prospective Crave Cookies franchisee, this highlights the importance of understanding the assumptions behind the financial statements. While the independent auditor believes that the financial statements present fairly the financial position of Crave Cookies, the use of estimates introduces an element of uncertainty. Franchisees should consider this uncertainty when evaluating the financial viability of investing in a Crave Cookies franchise and perhaps consult with a financial advisor to assess the potential impact of these estimates on their investment.