What kind of records must a Lees Famous Recipe franchisee maintain?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
- KK. "Records" means (1) monthly and annual chart of accounts; (2) monthly income statements; (3) monthly balance sheet and profit and loss statements; (4) monthly bank statements; (5) all annual tax returns relating to the Restaurant and each of its Principal Owners; (6) a complete annual financial statement (which, at our request, must be audited), including a balance sheet, profit and loss statement, and statement of cash flows, prepared in accordance with generally accepted accounting principles by an independent certified public accountant satisfactory to us and showing the results of your operations during such fiscal year; (7) any statistical or financial information regarding the operation of the Franchised Business, the Products and services sold by it, or data of a similar nature, including without limitation, any financial data that we believe that we need to compile or disclose in connection with the sale of franchises or that we may elect to disclose in connection with the sale of franchises and any or all product or equipment supply invoices reflecting purchases by or on behalf of the Franchised Business, and (8) such other records and information as we periodically may request.
Source: Item 22 — CONTRACTS (FDD pages 69–70)
What This Means (2025 FDD)
According to Lees Famous Recipe's 2025 Franchise Disclosure Document, franchisees are required to maintain specific records related to the operation of their restaurant. These records include a monthly and annual chart of accounts, monthly income statements, monthly balance sheet and profit and loss statements, and monthly bank statements. Additionally, franchisees must keep all annual tax returns pertaining to the restaurant and each of its principal owners.
Lees Famous Recipe also requires franchisees to maintain a complete annual financial statement, which, upon request, must be audited. This statement should include a balance sheet, profit and loss statement, and statement of cash flows, prepared by an independent certified public accountant in accordance with generally accepted accounting principles. This financial statement must accurately reflect the results of the franchisee's operations during the fiscal year.
Furthermore, franchisees must maintain any statistical or financial information regarding the operation of the franchised business, the products and services sold, and data of a similar nature. This includes any financial data that Lees Famous Recipe needs to compile or disclose in connection with the sale of franchises, as well as any product or equipment supply invoices reflecting purchases made by or on behalf of the franchised business. Franchisees are also obligated to maintain any other records and information that Lees Famous Recipe may periodically request.