Are sellers of Crisp & Green franchises advised to be aware that the interim balance sheet has not been audited?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
franchisee organization associated with the System.
ITEM 21 FINANCIAL STATEMENTS
The audited financial statements for our fiscal years ended December 31, 2023, December 31, 2022, and December 31, 2021, are attached as Exhibit G to this disclosure document. Our fiscal year end is December 31. We are also attaching our interim balance sheet as of March 31, 2024. THE INTERIM BALANCE SHEET IS PREPARED WITHOUT AN AUDIT. PROSPECTIVE FRANCHISEES OR SELLERS OF FRANCHISES SHOULD BE ADVISED THAT NO CERTIFIED PUBLIC ACCOUNTANT HAS AUDITED THESE FIGURES OR EXPRESSED HIS OR HER OPINION WITH REGARD TO THE CONTENT OR FORM.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 66)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, prospective franchisees or sellers of franchises should be aware that the interim balance sheet as of March 31, 2024, is prepared without an audit. The FDD explicitly states that no certified public accountant has audited these figures or expressed an opinion regarding their content or form.
This disclosure is important for potential franchisees because unaudited financial statements carry a higher risk of inaccuracies compared to audited statements. Audited financial statements undergo a thorough review by an independent certified public accountant, providing a higher level of assurance regarding their reliability. The absence of an audit means that the interim balance sheet has not been subjected to this independent verification process.
Therefore, prospective Crisp & Green franchisees should exercise caution when reviewing the interim balance sheet and consider it as a preliminary financial snapshot. It would be prudent to request additional information or clarification from Crisp & Green regarding any significant fluctuations or unusual items presented in the interim balance sheet. Understanding the limitations of unaudited financial information is crucial for making informed investment decisions.