What is specified regarding the audit requirements for Jack In The Box franchisees?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
Attached hereto as Exhibit A are the audited consolidated financial statements of our parent company, Jack in the Box SPV Guarantor, LLC and subsidiaries ("SPV"), as
of September 29, 2024 and October 1, 2023, the related consolidated statements of earnings, member's deficit, and cash flows for each of the fifty-two week periods ended September 29, 2024, October 1, 2023 and October 2, 2022, and the unaudited consolidated statements as of January 19, 2025. Under the Guaranty of Performance (included in Exhibit A), SPV has absolutely and unconditionally guaranteed our duties and obligations under the Franchise Agreement.
Also included are the audited consolidated balance sheets of our indirect parent company, Jack in the Box Inc. and subsidiaries as of September 29, 2024 and October 1, 2023, the related consolidated statements of operations, comprehensive (loss) income, cash flows and stockholders' deficit for each of the fifty-two week periods ended September 29, 2024, October 1, 2023 and October 2, 2022. These financials are being included for disclosure purposes only. As reflected in Item 1, Jack in the Box, Inc. is our Manager, performing certain services on our behalf. Jack in the Box, Inc. is not a party to the Franchise Agreement, Nontraditional License Agreement, or Development Agreements we sign with franchisees, nor does it guarantee any of our obligations.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 93–94)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the provided excerpts do not contain specific details regarding audit requirements for Jack In The Box franchisees. The documents focus on the audited financial statements of Jack in the Box SPV Guarantor, LLC and its subsidiaries, as well as Jack in the Box Inc. and subsidiaries. These audited statements are included as Exhibit A. The audit was conducted by KPMG LLP. The financial statements include consolidated balance sheets, statements of earnings, member's deficit, and cash flows. The independent auditors' report expresses an opinion that the financial statements present fairly the financial position of the company in accordance with U.S. generally accepted accounting principles. The report also mentions various agreements with its parent and affiliates related to administrative, management, and support activities. However, these statements are for the parent company and do not specify any audit requirements for franchisees.
While the FDD includes extensive financial information about Jack In The Box's parent companies, it does not extend to the specific audit obligations or requirements that franchisees must adhere to. The financial statements included are those of Jack in the Box SPV Guarantor, LLC and Jack in the Box Inc., not individual franchise operations. The independent auditor's report confirms the accuracy and compliance of these consolidated financial statements with accounting standards.
To fully understand the audit requirements for franchisees, prospective franchisees should ask Jack In The Box for details about the specific financial reporting and audit obligations outlined in the franchise agreement or related documents. This would include the frequency of audits, the required format for financial submissions, and any specific accounting standards or practices that franchisees must follow. Understanding these requirements is crucial for franchisees to ensure compliance and maintain a healthy financial standing with the franchisor.