What was the reported net accounts receivable for Exit?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
| Reported | As Restated | ||
|---|---|---|---|
| Balance Sheets | |||
| Accounts receivable, net | $ 96,173 | $ 110,383 |
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the company discovered in 2024 that it had incorrectly accounted for receivables submitted for reimbursement to Exit Realty Corp. International for advertising costs incurred during the year ended December 31, 2023. This resulted in under-reported accounts receivable and over-reported advertising costs. Consequently, the 2023 financial statements were restated to reflect the correct balances.
The restated balance sheet shows the net accounts receivable. The previously reported net accounts receivable was $96,173, but after the restatement, the net accounts receivable was reported as $110,383 as of December 31, 2023.
This restatement indicates that Exit's initial financial reporting had inaccuracies that needed correction. For a prospective franchisee, this highlights the importance of carefully reviewing the financial statements and understanding the reasons behind any restatements. It may also be prudent to seek clarification from Exit regarding their accounting practices and internal controls to ensure accurate financial reporting.