Are ADQ's separate financial statements included in the Dq Treat disclosure document?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
The following audited financial statements of IDQ are included in this disclosure document as Exhibit K: consolidated balance sheets of IDQ at December 31, 2024 and 2023 and related consolidated statements of income and comprehensive income, stockholder's equity and cash flows for each of the years ended December 31, 2024, 2023 and 2022, together with the independent auditor's report.
These financial statements are the consolidated financial statements of IDQ, the parent corporation of ADQ and its other subsidiaries. ADQ's separate financial statements are not included in this disclosure document. Should ADQ fail to fulfill its obligations to its franchisees, however, IDQ unconditionally guarantees to fulfill such obligations. A copy of IDQ's written Guarantee of Performance is included in Exhibit K.
Source: Item 21 — UItem 21U***:** U**Financial Statements (FDD page 67)
What This Means (2025 FDD)
According to the 2025 Dq Treat Franchise Disclosure Document, the separate financial statements of ADQ (American Dairy Queen Corporation) are not included. Instead, the disclosure document includes the audited consolidated financial statements of IDQ (International Dairy Queen), which is the parent corporation of ADQ and its other subsidiaries. These consolidated balance sheets cover the dates of December 31, 2024, and 2023. The related consolidated statements of income and comprehensive income, stockholder's equity, and cash flows are provided for each of the years ended December 31, 2024, 2023, and 2022, along with the independent auditor's report. These are presented as Exhibit K in the FDD.
For a prospective Dq Treat franchisee, this means you will not see the specific financial performance of ADQ itself. Instead, you're provided with the larger financial picture of its parent company, IDQ. While this gives an overview of the financial health of the overall organization, it doesn't offer insights into ADQ's individual profitability or financial stability.
However, IDQ provides an unconditional guarantee to fulfill ADQ's obligations to its franchisees. This guarantee is included as a written Guarantee of Performance in Exhibit K. This is a crucial safeguard for franchisees, ensuring that even if ADQ faces financial difficulties, IDQ is committed to stepping in to meet ADQ's financial responsibilities to its franchisees. This guarantee offers a level of security, mitigating some of the risk associated with not having ADQ's specific financial statements available.
In the state of Maryland, the addendum to the disclosure document emphasizes that you have not been provided with the financial statements of ADQ, the Franchisor, and therefore, you do not have knowledge of how this specific company has performed. However, it reiterates that IDQ, the parent corporation of ADQ, unconditionally guarantees the performance of ADQ, and a copy of the Guaranty of Performance is on file with the Attorney General.