As of December 31, 2023, were any tax years of Devon Creek subject to examination?

According to Devon Creek's 2024 Franchise Disclosure Document, as of December 31, 2023, no tax years were subject to examination by taxing authorities. The company's income tax returns are subject to examination for a period of three years from the date they are filed. Devon Creek is structured as a limited liability company (LLC) under Missouri law, meaning that any income or loss is included in the income tax returns of its member, not the company itself. Therefore, there is no provision for federal and state income taxes at the company level.

Devon Creek follows Accounting Standards Codification (ASC) Topic 740 regarding uncertainty in income taxes, which uses a more-likely-than-not measurement methodology. If taxing authorities were to disallow any tax positions, the additional income taxes would be imposed on the member rather than the company, and there would be no effect on Devon Creek's financial statements.

This information is relevant to a prospective franchisee because it provides insight into how Devon Creek handles its income taxes and what the potential tax liabilities are. Because Devon Creek is an LLC, the tax implications primarily affect its member, but it's still important for franchisees to understand the company's financial structure and tax practices. The fact that no tax years were subject to examination as of December 31, 2023, suggests that Devon Creek is compliant with tax regulations.