What accounting principles must Floyds 99 franchisees use when preparing financial statements?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
, EXPRESS OR IMPLIED, AND THERE ARE EXPRESSLY EXCLUDED ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
16.3 LIMITATION OF LIABILITY. IN NO EVENT SHALL THE FRANCHISOR HAVE ANY LIABILITY TO THE FRANCHISEE FOR CONSEQUENTIAL, PUNITIVE OR INCIDENTAL DAMAGES OF ANY KIND WHATSOEVER (EVEN IF THE FRANCHISOR HAS BEEN NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES), DIRECTLY OR INDIRECTLY RELATED TO THE PROGRAM OR THE LICENSE.
17. REPORTS, RECORDS AND FINANCIAL STATEMENTS
17.1 Franchisee Reports. The Franchisee shall establish and maintain, at its own expense, bookkeeping, accounting and data processing systems which conform to the specifications that the Franchisor may prescribe from time to time. Each transaction of the Barbershop shall be processed in the manner prescribed by the Franchisor. The Franchisor shall have the right of independent access to all data with respect to the Barbershop. The Franchisor reserves the right to require the Franchisee to provide the Franchisor with access to the Franchisee's data by installing a modem or joining and paying for an electronic network connection service which meets the Franchisor's standards and specifications. The Franchisee shall supply to the Franchisor such types of reports in a manner and form as the Franchisor may from time to time reasonably require, including:
- a. by a designated day of each week a report on the Barbershop's Gross Sales for the previous week;
- b. monthly financial statements, prepared in accordance with Generally Accepted Accounting Principles ("GAAP"), consistently applied, using the forms and chart of accounts as prescribed by the Franchisor, which shall include a profit and loss statement and balance sheet for the FLOYD'S 99 Shop or for the Franchisee entity, mailed or otherwise forwarded to the Franchisor by no later than the 15th day following the end of the month, based on operating results of the previous month, which shall be submitted in a form approved by the Franchisor;
- c. a report on the Franchisee's Local Advertising Allocation expenditures in each calendar quarter, as further described in Section 13.3 of this Agreement, on such date designated by Franchisor following such calendar quarter and in the Franchisor's recommended format;
- d. within 90 days after the end of the Franchisee's fiscal year, a balance sheet and profit and loss statement prepared in accordance with GAAP, consistently applied, for the Barbershop for such year;
- e. within 10 days after such returns are filed, exact copies of federal and state income, sales and any other tax returns and such other forms, records, books and other information as the Franchisor may periodically require; and
f.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, franchisees must adhere to Generally Accepted Accounting Principles (GAAP) when preparing their financial statements. This requirement applies to both monthly and annual financial statements, ensuring consistency and comparability across all Floyds 99 franchise locations. The financial statements must be prepared using the forms and chart of accounts prescribed by Floyds 99.
Specifically, franchisees must submit monthly financial statements, including a profit and loss statement and balance sheet, no later than the 15th day following the end of each month. These statements should reflect the operating results of the previous month and be submitted in a format approved by Floyds 99. Additionally, within 90 days after the end of the franchisee's fiscal year, an annual balance sheet and profit and loss statement, also prepared in accordance with GAAP, must be submitted for the Barbershop.
Floyds 99 also requires franchisees to maintain all books and records for their shop in a manner reasonably prescribed by the company and to preserve these records for at least five years after the fiscal year to which they relate. Franchisees are also obligated to provide copies of federal and state income, sales, and other tax returns within 10 days of filing, along with any other forms, records, books, and information that Floyds 99 may periodically require. This level of oversight allows Floyds 99 to monitor the financial health and performance of its franchise locations and to ensure compliance with accounting standards.