Regarding Floyds 99's financial statements, what is the potential impact of the estimates and assumptions made by management?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the company's financial statements rely on estimates and assumptions made by its management. These estimates affect the reported values of assets, liabilities, and contingent items, as well as the reported revenue and expenses during the financial reporting periods. This is a standard accounting practice.
The FDD emphasizes that the actual financial results for Floyds 99 could differ from these estimates. This means that the financial statements provided are not a guarantee of future performance, and a prospective franchisee should understand that the real financial outcomes might not align perfectly with the figures presented.
As a potential Floyds 99 franchisee, it is important to recognize that these estimates are subject to inherent uncertainties. Prudent due diligence would involve understanding the critical assumptions management makes and how sensitive the financial results are to changes in those assumptions. Consulting with a financial advisor to review the financial statements and assess the reasonableness of the estimates is advisable.