Does the Hawaiian Bros Island Grill FDD include financial statements?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
- (26) Within 30 days after the end of each month or other time period as may be communicated by Company from time to time, Franchisee must furnish Company with a balance sheet and profit and loss and cash flow statements for the Franchised Restaurant for the applicable time period.
Franchisee will maintain complete and accurate books and records relating to the operation of the Franchised Restaurant in accordance with Section 7(d)(22) and Section 7(d)(25), permit Company representatives to inspect such books and records at reasonable times and, within 45 days after the end of each fiscal year of the Franchised Restaurant (90 days if required to be audited or reviewed), submit to Company a balance sheet, income statement and statement of cash flow for the year then ended.
These financial statements must be prepared by an independent certified public accountant, disclose separately the items specified by Company on forms it provides and be prepared in accordance with the accounting principles and practices Company prescribes, and be compiled, reviewed or audited at Company's election.
If Franchisee is at any time required to furnish any lender, lessor, government agency or other person any financial statements with respect to Franchisee's franchised business, Franchisee must concurrently furnish Company a copy of such financial statements.
Franchisee must maintain for at least three years from the dates of their preparation full, complete, and accurate books, records, and accounts, including, but not limited to, sales slips, coupons, purchase orders, check stubs, bank statements, sales tax records and returns, cash receipts and disbursements, journals and ledgers in accordance with Company's requirements.
Franchisee acknowledges that Company may disclose publicly anonymized or aggregated results of operations and other information of Hawaiian Bros Island Grill franchisees, including Franchisee, and certain former Hawaiian Bros Island Grill franchisees, and Franchisee gives Company permission to do so.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 77)
What This Means (2025 FDD)
According to the 2025 Hawaiian Bros Island Grill FDD, Item 23 discusses the receipts and financial reporting requirements for franchisees. Franchisees are required to provide Hawaiian Bros Island Grill with monthly balance sheets, profit and loss statements, and cash flow statements. Additionally, within 45 days after the end of each fiscal year (or 90 days if an audit or review is required), franchisees must submit an annual balance sheet, income statement, and statement of cash flow. These annual financial statements must be prepared by an independent certified public accountant and follow the accounting principles prescribed by Hawaiian Bros Island Grill.
These financial statements can be compiled, reviewed, or audited at Hawaiian Bros Island Grill's discretion. If a franchisee is required to furnish financial statements to any lender, lessor, government agency, or other person, they must also provide a copy to Hawaiian Bros Island Grill. Franchisees are also obligated to maintain complete and accurate books and records for at least three years, including sales slips, purchase orders, bank statements, and tax records.
While the FDD outlines the financial reporting obligations of franchisees, it does not explicitly state whether the FDD itself includes the franchisor's financial statements. Item 19 of the FDD does discuss financial performance representations, indicating that Hawaiian Bros Island Grill may provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets if there is a reasonable basis for the information. A prospective franchisee should review Item 21 in the FDD to see if financial statements are included.