On what basis of accounting are Exit's consolidated financial statements prepared?

According to Exit's 2025 Franchise Disclosure Document, the company prepares its consolidated financial statements using the accrual basis of accounting. This method conforms with accounting principles generally accepted in the United States of America (GAAP).

The accrual basis of accounting recognizes revenues when earned and expenses when incurred, regardless of when cash changes hands. This approach provides a more accurate picture of a company's financial performance over a period of time compared to cash basis accounting, which recognizes revenues and expenses only when cash is received or paid.

For a prospective Exit franchisee, this means that the financial statements included in the FDD are prepared according to a standard and widely accepted accounting method. This allows for a more comprehensive understanding of Exit's financial position and performance. It also facilitates comparisons with other franchise systems that also use GAAP-compliant accrual accounting.