How should the 'Financial Statements' be prepared for a Southern Steer franchise?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
Financial Statements. "Financial Statements" will mean a balance sheet, profit and loss statement, statement of cash flows, and explanatory footnotes prepared in accordance with generally accepted accounting principles applied on a consistent basis.
The Franchisee will maintain and preserve for at least five years from the dates of their preparation, full, complete and accurate books, records and accounts in accordance with generally accepted accounting principles and in the form and manner prescribed by the Franchisor from time to time.
The Franchisee will send the Franchisor annual income and expense statements within 60 days of the end of Franchisee fiscal year.
The Franchisee will also send the Franchisor weekly summary reports each Wednesday based on the preceding week, monthly profit and loss statements by the fifteenth day of the following month and any other information or reports including copies of balance sheets, copies of sales tax returns, and such other financial reports and information as the Franchisor may reasonably request.
However, the Franchisee will not be obligated to disclose confidential tax returns if such disclosure would violate applicable state law.
All reporting data will be prepared in accordance with generally accepted accounting principles, consistently applied.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, the franchisee must maintain full, complete, and accurate books, records, and accounts in accordance with generally accepted accounting principles (GAAP). These records must be kept for at least five years from the date of preparation and in the form and manner prescribed by Southern Steer from time to time.
The financial statements themselves, as defined in the FDD, will mean a balance sheet, profit and loss statement, statement of cash flows, and explanatory footnotes prepared in accordance with generally accepted accounting principles applied on a consistent basis.
Southern Steer requires franchisees to submit annual income and expense statements within 60 days of the end of the franchisee's fiscal year. Additionally, franchisees must send weekly summary reports each Wednesday based on the preceding week, monthly profit and loss statements by the fifteenth day of the following month, and any other financial reports or information that Southern Steer may reasonably request, including copies of balance sheets and sales tax returns. However, franchisees are not obligated to disclose confidential tax returns if such disclosure would violate applicable state law. All reporting data must be prepared in accordance with generally accepted accounting principles, consistently applied.