Does Ella Cafe provide an unaudited balance sheet as of June 30, 2024?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
ITEM 21 FINANCIAL STATEMENTS
We have not been in business for three years or more, and therefore cannot include all financial statements required by the Franchise Rule of the Federal Trade Commission.
Exhibit F contains the following:
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- unaudited balance sheet as of June 30, 2024 and profit and loss statement from January 1, 2024 to June 30, 2024; and
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- audited balance sheets as of December 31, 2023 and 2022 and related statements of operations, changes in stockholders' equity, and cash flows for the years then-ended.
Our fiscal year end is December 31st.
EXHIBIT F
FINANCIAL STATEMENTS
THESE FINANCIAL STATEMENTS HAVE BEEN PREPARED WITHOUT AN AUDIT. PROSPECTIVE FRANCHISEES OR SELLERS OF FRANCHISES SHOULD BE ADVISED THAT NO INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT HAS AUDITED THESE FIGURES OR EXPRESSED AN OPINON WITH REGARD TO THEIR CONTENT OR FORM.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 49–50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, the franchisor includes an unaudited balance sheet as of June 30, 2024. This balance sheet is part of Exhibit F, which also contains a profit and loss statement from January 1, 2024, to June 30, 2024, as well as audited balance sheets from prior years.
Because the balance sheet as of June 30, 2024 is unaudited, prospective franchisees should be aware that no independent certified public accountant has audited these figures or expressed an opinion regarding their content or form. This means the financial information has not been independently verified and may be subject to change or correction. While unaudited statements can provide a general overview of Ella Cafe's financial position, franchisees should exercise caution and consider seeking professional financial advice to fully understand the implications.
The inclusion of both unaudited and audited financial statements is a common practice in franchise disclosure documents. The audited statements offer a more reliable view of the company's past performance, while the unaudited statements provide more current, though less certain, information. Ella Cafe also includes audited balance sheets as of December 31, 2023, and 2022, along with related statements of operations, changes in stockholders' equity, and cash flows for the years then ended.
As a potential franchisee, it is crucial to carefully review all financial statements and understand the difference between audited and unaudited reports. Consider consulting with a financial advisor to assess the financial health of Ella Cafe and the potential risks and rewards of investing in the franchise.