What accounting procedures does Devon Creek require franchisees to use for bookkeeping?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
- 12.2.1. Franchisee agrees to keep and maintain complete and accurate books and records of its transactions and business operations using the accounting procedures specified by Franchisor. Franchisee agrees to purchase the computer systems specified in Section 12.3 to maintain the records and accounts of the Franchisee to the standards of the Franchisor and which allow Franchisor electronic access to such records and accounts in accordance with Section 12.3.2. Franchisee acknowledges and agrees that the financial performance of Franchisee's Franchised Business may be published in franchise disclosure document(s) issued by Franchisor following the Effective Date hereof.
- 12.2.2. Within thirty (30) days after the close of each calendar quarter and within ninety (90) days after the close of each fiscal year, Franchisee will furnish Franchisor a full and complete written statement of income and expense and a profit and loss statement for the operation of the Franchised Business during said period, together with a balance sheet for the Franchised Business, all of which shall be prepared in accordance with generally accepted accounting principles and practice. Franchisee's annual statements and balance sheets shall be prepared by an independent certified public accountant and certified to be correct.
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, franchisees must maintain complete and accurate books and records of their transactions and business operations, using accounting procedures specified by Devon Creek. Franchisees must purchase computer systems that meet Devon Creek's standards to maintain these records and accounts, and these systems must allow Devon Creek electronic access. Devon Creek may publish the franchisee's financial performance in future franchise disclosure documents.
Within 30 days after each calendar quarter and 90 days after each fiscal year, franchisees must provide Devon Creek with a complete written statement of income and expense, as well as a profit and loss statement for the operation of the franchised business during that period. They must also furnish a balance sheet for the franchised business.
All financial statements must be prepared in accordance with generally accepted accounting principles. The annual statements and balance sheets must be prepared and certified as correct by an independent certified public accountant. This ensures accuracy and compliance with standard accounting practices.