Are the revenue reports from Crisp & Green franchisees audited?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
In the tables below, we report gross Restaurant sales data from our sole Corporate Restaurant and our franchised Restaurants that were open for the entire 2023 calendar year. The disclosures present the average and median gross sales performance of these Restaurants in calendar year 2023. The information is based on revenue reports we received from our franchisees, which were not audited, and the revenue and expense reports of our Corporate Restaurant, which were also not audited.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 57–62)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, the revenue reports from franchisees are not audited. The financial performance representation in Item 19 is based on revenue reports received from franchisees for the calendar year ended December 31, 2023. The FDD clearly states that these reports were not subjected to an audit. The revenue and expense reports for the one Corporate Restaurant were also not audited.
This means that the figures presented, such as the average gross sales of $1,760,761 for franchised restaurants operating for over 24 months, are based on unverified data provided by the franchisees themselves. While this is not uncommon in the franchise industry, it's important for prospective franchisees to recognize that these numbers have not been independently verified.
As a prospective franchisee, it is crucial to understand the limitations of unaudited financial data. While the franchisor is providing this information in good faith, the lack of an audit means there is a greater risk of inaccuracies or inconsistencies. It would be prudent to conduct your own due diligence, including speaking with existing franchisees and potentially consulting with a financial advisor, to assess the reasonableness of these figures and the potential financial performance of a Crisp & Green franchise.