On what accounting basis should Face Foundrie Area Developers prepare their profit and loss statements?

According to Face Foundrie's 2025 Franchise Disclosure Document, Area Developers are required to prepare their profit and loss statements on an accrual basis. This means that revenue and expenses are recognized when they are earned or incurred, regardless of when cash changes hands. These statements must also adhere to generally accepted accounting principles (GAAP), ensuring consistency and comparability in financial reporting.

Specifically, Area Developers must submit a profit and loss statement to Face Foundrie by the 20th day of each calendar month, reflecting the operations of each Franchised Facial Bar for the preceding month. Additionally, on April 15th of the year following the end of the Area Developer's fiscal year, a complete annual financial statement must be prepared according to GAAP, on a compilation basis. Face Foundrie may also require these annual statements to be prepared by an independent certified public accountant.

Furthermore, Area Developers are obligated to maintain full, complete, and accurate books, records, and accounts in accordance with generally accepted accounting principles throughout the term of their agreement. These records must be preserved for at least seven years from the date of preparation and made available to Face Foundrie upon request, at the Area Developer's expense. Failure to comply with these financial reporting requirements can result in the Area Developer being deemed in default of their agreement with Face Foundrie.