What accounting standards must Deer Solution franchisees use when preparing monthly financial statements?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
This summary of significant accounting policies is presented to assist the reader in understanding and evaluating the Company's financial statements. The financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of financial statements.
A. Basis of Accounting
The Company's financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP").
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Deer Solution requires that its financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). This means that Deer Solution adheres to a standardized set of guidelines and practices for financial reporting. These principles ensure transparency and consistency in how financial information is recorded and presented.
For a prospective Deer Solution franchisee, this implies that their financial reporting must align with GAAP standards. This includes the basis of accounting, how cash and cash equivalents are handled, and how the brand development fund is managed. Franchisees will need to ensure their accounting practices are consistent with GAAP to accurately reflect their financial performance and position.
Deer Solution's adherence to GAAP also affects the audit process. The auditor's report included in the FDD states that the audit was conducted in accordance with generally accepted auditing standards. This provides assurance that the financial statements are fairly presented and free from material misstatements, which is crucial for potential investors and franchisees assessing the financial health of the company.