When preparing consolidated financial statements, what is management required to evaluate regarding the company's ability to continue as a going concern for Moes Southwest Grill?

According to the 2025 FDD, when preparing consolidated financial statements, management is required to evaluate whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern. This evaluation considers all conditions and events in the aggregate and assesses the company's viability for one year after the consolidated financial statements are available to be issued.

This evaluation is a standard accounting practice, ensuring that the financial statements provide a realistic view of the company's financial health. It is crucial for prospective franchisees to understand that this assessment reflects the franchisor's overall financial stability, which can impact the support and resources available to franchisees. If there are significant doubts about the company's ability to continue as a going concern, it could affect the franchisee's investment and the long-term viability of their Moes Southwest Grill business.

Prospective franchisees should review the financial statements and any related auditor's reports carefully. If the auditor's report contains language indicating substantial doubt about the company's ability to continue as a going concern, it would be prudent to seek professional financial advice and to ask the franchisor for additional information about their plans to address these concerns. This due diligence can help a franchisee make an informed decision about investing in a Moes Southwest Grill franchise.