What accounting procedures and chart of accounts must a Fly Fitness franchisee use?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
12.2. Bookkeeping and Reports.
- 12.2.1. Franchisee agrees to keep and maintain complete and accurate books and records of its transactions and business operations using the accounting procedures and chart of accounts specified by Franchisor. Franchisee agrees to purchase the Computer Systems specified in Section 12.3 to maintain the records and accounts of the Franchisee to the standards of the Franchisor. Franchisee acknowledges and agrees that the financial data of Franchisee's Franchised Business (i) is owned by Franchisor, (ii) is Fran
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, franchisees must adhere to specific accounting procedures and a chart of accounts as mandated by Fly Fitness. To maintain records and accounts up to Fly Fitness's standards, franchisees must purchase computer systems that Fly Fitness specifies. The FDD states that Fly Fitness owns the franchisee's franchised business's financial data.
This requirement ensures that all Fly Fitness franchises maintain consistent and standardized financial reporting. This allows Fly Fitness to effectively monitor the financial performance of its franchise network and to provide appropriate support and guidance to franchisees. It also facilitates the preparation of consolidated financial statements and compliance with regulatory requirements.
For a prospective franchisee, this means they will need to invest in the specified computer systems and strictly follow the accounting procedures and chart of accounts provided by Fly Fitness. While this may limit the franchisee's flexibility in choosing their preferred accounting methods, it ensures uniformity and simplifies the process of reporting financial data to Fly Fitness. Franchisees should budget for the costs of the required computer systems and any associated training or support to comply with these requirements.