Definition:
Item 21 in the FDD shows the franchisor’s audited financial statements. These include balance sheets, income reports, and cash flow statements. It’s how you see the money side of the business before buying in.
Use It in a Sentence:
Before joining the franchise, Jamie checked Item 21 in the Franchise Disclosure Document to review the company’s financial reports.
Why Are Item 21 Details Important?
When you’re thinking about buying a franchise like CoolVu, it’s smart to check the numbers first. Item 21 gives you a full picture of the franchisor’s financial health. You’ll see how much money the company makes, how it spends, and whether it’s financially stable.
This matters because your investment depends on the strength of the company behind the brand. Audited reports in Item 21 help protect you from surprises. An independent accountant reviews and confirms the numbers, so you’re not just taking the company’s word for it.
If you’re looking into CoolVu’s window films, custom wall graphics, or architectural surfaces, knowing the company’s financial position helps you plan better. These details tell you if the business can support its franchisees over time.
Also, it helps you ask better questions. If something seems off in the statements, you can bring it up before signing anything. Item 21 gives you the facts so you can make a solid decision.
In short, this section exists to help you feel confident in what you’re buying into. It’s a key part of doing your homework before becoming a CoolVu franchise owner.
Related Dictionary Terms:
- Franchise Disclosure Document (FDD) – Legal summary.
- Item 1 in FDD: Identifies ownership, location, and business ties.
- Item 2 in FDD: Shows leadership experience behind the brand.
- Item 3 in FDD: Lists legal history and potential risks.
- Item 4 in FDD: Discloses past bankruptcies for review.
- Item 5 in FDD: Upfront startup fees listed.
- Item 6 in FDD: Lists ongoing fees for operating the franchise.
- Item 7 in FDD: Outlines estimated startup and operating costs.
- Item 8 in FDD: Lists supplier rules and product standards.
- Item 9 in FDD: Lists franchisee duties and responsibilities.
- Item 10 in FDD: Explains franchisor financing and loan options.
- Item 11 in FDD: Lists franchisor training, tools, and support.
- Item 12 in FDD: Explains territory rights and restrictions.
- Item 13 in FDD: Lists trademarks and legal protections.
- Item 14 in FDD: Covers patents, copyrights, proprietary info.
- Item 15 in FDD: Explains owner’s operational role.
- Item 16 in FDD: Lists what franchisees can sell.
- Item 17 in FDD: Renewal, transfer, & ending agreements rules.
- Item 18 in FDD: Shows public figures’ roles and ties.
- Item 19 in FDD: Shows sales numbers and earnings data.
- Item 20 in FDD: Tracks openings, closings, and transfers.
- Item 22 in FDD: Lists all required franchise contracts.
- Item 23 in FDD: Confirms receipt and starts 14-day wait.
