Are the financial statements for Petro Stopping Center audited?

According to Petro Stopping Center's 2025 Franchise Disclosure Document, the financial statements of BPCNA, the parent company, are audited. Specifically, Exhibit D includes BPCNA's audited consolidated balance sheets as of December 31, 2024, and December 31, 2023. These balance sheets are accompanied by related consolidated statements of profit and loss, comprehensive income, changes in stockholders' equity, and cash flows for the years ended December 31, 2024, 2023, and 2022, along with related notes.

This indicates that while the parent company's financials are audited by an independent firm, the FDD does not explicitly state that the individual Petro Stopping Center franchise's financial statements are audited. However, franchisees are required to submit reviewed financial statements prepared by an independent certified public accountant to Petro Stopping Center within 120 days after the end of each calendar year. These reviewed financial statements must include an annual profit and loss statement, a statement of cash flows, and a balance sheet for the franchisee's center as of the end of the calendar year.

Prospective franchisees should note the distinction between 'audited' and 'reviewed' financial statements. An audit provides a higher level of assurance than a review, as it involves a more detailed examination of the financial records. A review, while less extensive, still requires the accountant to perform inquiries and analytical procedures to provide limited assurance that there are no material modifications that should be made to the financial statements. Franchisees should consult with a financial advisor to understand the implications of submitting reviewed versus audited statements.

Furthermore, Petro Stopping Center retains the right to inspect and audit a franchisee's Petro Center, bookkeeping and accounting records, sales and tax records, and returns at any time during business hours without prior notice. Franchisees are expected to cooperate fully with Petro Stopping Center's representatives and independent accountants during such inspections or audits. Franchisees may be responsible for covering the costs of these audits if the audit is necessitated by the franchisee's failure to furnish required reports or if the audit reveals discrepancies in the amounts owed to Petro Stopping Center.