To whom should the Red Wagon Club franchisee submit the requested operating statements, financial statements, statistical reports, and other information?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall comply with the following reporting obligations:
- (a) within the time limits specified in the Operations Manual or otherwise in writing by Franchisor, such other periodic operating statements, financial statements, statistical reports, daily Business Account statements, and other information Franchisor request regarding Franchisee and Franchisee's RWC Business;
- (b) by March 1 of each year, annual profit and loss and source and use of funds statements and a balance sheet for Franchisee's RWC Business as of the end of the prior calendar year; provided, however, Franchisor reserves the right to require Franchisee to submit such reports on a monthly basis showing Franchisee's financial results for the preceding month; and
- (c) within 10 days after Franchisor's request, exact copies of federal and state income tax returns, sales tax returns, and any other forms, records, books, and other information Franchisor may periodically require relating to Franchisee and Franchisee's RWC Business.
Franchisor may, in its sole discretion, require Franchisee to submit or otherwise provide Franchisee's monthly statements or other records for Franchisee's RWC Business on a more or less frequent basis, through electronic means or otherwise, including through any reporting software or other tools as Franchisor may require. Franchisee (or one of its employees) agrees to sign and verify each report and financial statement in the manner Franchisor prescribes. Franchisor may disclose data derived from these reports. Moreover, Franchisor may, as often as Franchisor deems appropriate (including on a daily basis), independently access the Technology System, and retrieve and retain all information relating to the operation of Franchisee's RWC Business. Franchisor may require Franchisee to have audited financial statements prepared annually during the Term.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club Franchise Disclosure Document, franchisees are obligated to provide various reports and information to the franchisor, Red Wagon Club Franchise, LLC. This includes periodic operating statements, financial statements, statistical reports, and daily Business Account statements, as requested in the Operations Manual or in writing by Red Wagon Club.
The FDD specifies that franchisees must submit annual profit and loss statements, source and use of funds statements, and a balance sheet for their Red Wagon Club business by March 1st of each year, reflecting the prior calendar year's financials. However, Red Wagon Club retains the right to request these reports on a monthly basis, detailing the franchisee's financial results for the preceding month. Additionally, franchisees must provide exact copies of federal and state income tax returns, sales tax returns, and any other required forms, records, books, and information within 10 days of Red Wagon Club's request.
Red Wagon Club has the discretion to adjust the frequency of these submissions, requiring them more or less often, and may specify the method of submission, including electronic means or through designated reporting software. Franchisees, or their employees, are required to sign and verify each report and financial statement as prescribed by Red Wagon Club. Furthermore, Red Wagon Club can independently access the Technology System to retrieve and retain information related to the franchisee's Red Wagon Club business, potentially even on a daily basis. Red Wagon Club also reserves the right to require franchisees to have audited financial statements prepared annually during the term of the franchise agreement.