Why can't Punch King Fitness include all required financial statements in the FDD?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
The franchisor has not been in business for three years or more; and, therefore, cannot include all financial statements required.
THESE FINANCIAL STATEMENTS ARE PREPARED WITHOUT AN AUDIT. PROSPECTIVE FRANCHISEES OR SELLERS OF FRANCHISES SHOULD BE ADVISED THAT NO CERTIFIED PUBLIC ACCOUNTANT HAD AUDITED THESE FIGURES OR EXPRESSED HIS/HER OPINION WITH REGARD TO THE CONTENT OR FORM.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to Punch King Fitness's 2024 Franchise Disclosure Document, the franchisor is unable to include all required financial statements because the company has not been in business for at least three years. This is a common situation for newer franchises. The FDD states that the financial statements provided are unaudited.
Because the financial statements are unaudited, the FDD advises prospective franchisees to be aware that no certified public accountant has audited these figures or expressed an opinion on their content or form. This lack of an audit means there is less independent verification of the financial data's accuracy.
Prospective franchisees should consider this limitation when reviewing the financial information provided. It would be prudent to ask Punch King Fitness for additional information or clarification on any aspects of the financial statements that are unclear. Seeking advice from a financial advisor or accountant is also recommended to fully understand the financial health and potential risks associated with investing in this franchise.