Does the Fitstop FDD include a statement of retained earnings?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
We have audited the financial statements of Fitstop USA, INC. which comprise the balance sheet as of December 31, 2023 and 2022, and the related statement of operations and changes in members' equity, and cash flow for the years then ended, and the related notes to the financial statements.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of Fitstop USA, INC. as at December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States of America.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2024 FDD)
Based on the 2024 Fitstop FDD, the financial statements of Fitstop USA, INC. include a balance sheet as of December 31, 2023 and 2022. These statements also incorporate a statement of operations and changes in members' equity, and cash flow statements for the years then ended. The independent auditor's report indicates that these financial statements present fairly the financial position, results of operations, and cash flows of Fitstop USA, INC. in accordance with accounting principles generally accepted in the United States of America.
While the auditor's report mentions a statement of operations and changes in members' equity, it does not explicitly refer to a statement of retained earnings. However, the balance sheet included in the FDD does show equity information. As of November 2022, Fitstop's equity included current year earnings of ($412,458), other equity consisting of a foreign currency translation reserve of $952, and total equity of ($411,507).
Given that the statement of changes in members' equity is included, a prospective franchisee may want to request from Fitstop a detailed breakdown of this statement, to understand how retained earnings are tracked and managed within the company's financials. This will provide further clarity on the equity position of Fitstop USA, INC.