For Exit Realty Upper Midwest, what years are covered by the audited financial statements included as Exhibit F in the FDD?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| FINANCIAL STATEMENTS | ||||||||
|---|---|---|---|---|---|---|---|---|
| Attached to this Disclosure Document as Exhibit F are EXIT Realty Upper Midwest’s audited | ||||||||
| financial statements | for the years ending | December | 31, | 2022, | December | 31, | 2023, | and |
INDEPENDENT AUDITOR'S REPORT
To the Stockholders of Upper Midwest Realty, Inc. d.b.a. Exit Realty Upper Midwest Lakeville, Minnesota
Opinion
We have audited the accompanying financial statements of Upper Midwest Realty, Inc. d.b.a. Exit Realty Upper Midwest (a Minnesota S corporation), which comprise the Balance Sheets as of December 31, 2024, 2023, and 2022, and the related Statements of Income (Loss), Changes in Stockholders' Equity (Deficit), and Cash Flows for the years then ended, and the related Notes to the Financial Statements.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial positions of Upper Midwest Realty, Inc. d.b.a. Exit Realty Upper Midwest as of December 31, 2024, 2023, and 2022, and the results of their operations and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Correction of Error
As discussed in Note 12 to the financial statements, certain errors resulting in understatement and overstatement of amounts previously reported for accounts receivables and advertising costs as of December 31, 2023, were discovered by management of the Company during the current year. Accordingly, amounts reported for accounts receivable and advertising costs have been restated in the 2023 financial statements now presented, and an adjustment has been made to retained earnings as of December 31, 2023, to correct the error. Our opinion is not modified with respect to this matter.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the audited financial statements for Exit Realty Upper Midwest included as Exhibit F cover the years ending December 31, 2022, December 31, 2023, and December 31, 2024. These financial statements include the Balance Sheets, Statements of Income (Loss), Changes in Stockholders' Equity (Deficit), and Cash Flows, along with related notes.
These audited statements provide prospective franchisees with a look at Exit Realty Upper Midwest's financial performance over the past three years. Reviewing these statements can help potential franchisees assess the financial stability and profitability of the sub-franchisor. It is important to note that these are the financial statements of the sub-franchisor, Exit Realty Upper Midwest, and not the franchise itself.
The inclusion of three years of audited financial statements is a standard practice in franchising, allowing potential franchisees to identify trends and evaluate the overall financial health of the franchise system. The audit was conducted in accordance with generally accepted auditing standards in the United States of America, providing an additional level of assurance regarding the accuracy and reliability of the financial information.
Note 12 to the financial statements mentions that certain errors were discovered by management during the current year, resulting in understatement and overstatement of amounts previously reported for accounts receivables and advertising costs as of December 31, 2023. These amounts have been restated in the 2023 financial statements, and an adjustment has been made to retained earnings as of December 31, 2023, to correct the error. The auditor's opinion was not modified with respect to this matter.