What specific financial documents must an Exit franchisee file annually with Exit and the Subfranchisor?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Within ninety (90) days after the close of Franchisee's fiscal year, as used for federal income tax purposes, Franchisee shall file with EXIT and Subfranchisor a statement, showing the year-end balance sheet and the results of operations for the year including gross sales and revenues for the year, with a comparison to the prior year's
balance sheet and results from operations. Franchisee shall also file with EXIT and Subfranchisor any other reports as EXIT or Subfranchisor may, from time to time, request. All statements shall be certified by Franchisee (or the chief financial officer if Franchisee is not an individual).
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, franchisees are required to submit specific financial statements to both Exit and the Subfranchisor on an annual basis. Within 90 days following the close of the franchisee's fiscal year, which is determined by their federal income tax year, the franchisee must provide a statement. This statement should include a year-end balance sheet and the results of operations for the year, detailing gross sales and revenues, along with a comparison to the previous year's balance sheet and operational results.
In addition to the annual financial statement, Exit franchisees are obligated to file any other reports that Exit or the Subfranchisor may request periodically. This allows Exit and the Subfranchisor to gather additional financial data or specific information as needed for compliance, analysis, or strategic planning purposes.
All financial statements submitted by the Exit franchisee must be certified. If the franchisee is an individual, they must personally certify the statements. If the franchisee operates as a corporation, partnership, or limited liability company, the chief financial officer is responsible for certifying the accuracy and completeness of the financial documents. This certification requirement ensures accountability and verifies the reliability of the financial information provided to Exit and the Subfranchisor.