What is the purpose of including financial statements in the Crisp & Green FDD?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
1, 2023, 2022, AND 2021**
| INDEPENDENT AUDITORS' REPORT | 1 |
|---|---|
| FINANCIAL STATEMENTS | |
| BALANCE SHEETS | 3 |
| STATEMENTS OF OPERATIONS | 4 |
| STATEMENTS OF MEMBER'S EQUITY | 5 |
| STATEMENTS OF CASH FLOWS | 6 |
| NOTES TO FINANCIAL STATEMENTS | 7 |
CliftonLarsonAllen LLP CLAconnect.com
INDEPENDENT AUDITORS' REPORT
Member Crisp & Green Franchising LLC Wayzata, Minnesota
Report on the Audit of the Financial Statements Opinion
We have audited the accompanying financial statements of Crisp & Green Franchising LLC, which comprise the balance sheets as of December 31, 2023, 2022, and 2021 and the related statements of operations, member's equity, and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Crisp & Green Franchising LLC as of December 31, 2023, 2022, and 2021, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Crisp & Green Franchising LLC and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 66)
What This Means (2024 FDD)
According to the 2024 Crisp & Green Franchise Disclosure Document, the inclusion of audited financial statements is to provide prospective franchisees with a clear and fair view of the company's financial position. The financial statements include balance sheets as of December 31, 2023, 2022, and 2021, along with statements of operations, member's equity, and cash flows for the years then ended, and related notes. These statements are prepared following accounting principles generally accepted in the United States of America. Independent auditors, CliftonLarsonAllen LLP, have audited these statements and issued an opinion.
The auditors' report aims to provide reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error. This assurance is not absolute, but it represents a high level of confidence. The auditors' responsibilities include exercising professional judgment, assessing risks of material misstatement, understanding internal controls, evaluating accounting policies, and concluding whether there are conditions that raise substantial doubt about Crisp & Green's ability to continue as a going concern. Management is responsible for preparing the financial statements and maintaining internal controls relevant to their accuracy and fair presentation.
Management is required to evaluate whether there are conditions or events that raise substantial doubt about Crisp & Green Franchising LLC's ability to continue as a going concern for one year after the date the financial statements are available to be issued. Notes to the financial statements also offer additional context, such as the nature of Crisp & Green's business, which is operating a franchising business under the concept name CRISP & GREEN®, the basis of accounting, and the use of estimates in preparing the financial statements. Subsequent events are evaluated to determine if any adjustments or disclosures are needed, with the latest evaluation performed through April 29, 2024.
For a prospective franchisee, reviewing these financial statements is crucial for assessing the financial health and stability of Crisp & Green. It allows them to understand the company's past performance, current financial position, and ability to meet its obligations. By understanding these aspects, potential franchisees can make a more informed decision about investing in a Crisp & Green franchise. They should pay close attention to the auditors' opinion, any notes to the financial statements, and any discussions about the company's ability to continue as a going concern.