The Hair Emporium Coursework Example | Topics and Well Written Essays - 1000 words

The Hair department store - Coursework ExampleThere are various reporting requirements in franchising as already mentioned above info packaged is both operational and contractual. Through the Franchise Disclosure Documents (FDD) the franchisor is required to disclose or share its annual audited monetary accounting reports with the franchisees (Mann & Roberts, 2007). Consequently, the franchisees can/may request ongoing FDD in accompaniment with audited monetary statements at any time. Further, the franchisor is obliged to provide on-going assistance to the franchisees as stated in the franchise understanding this often occurs via franchise operations and training manuals that are continuously updated. FDDs usually include franchise agreements, and pecuniary statements including the balance sheet, statement of earnings, income statement, cash flow statement and the statement of owners equity. These documents are live as they help the Franchisees to shaft the franchisors his tory of profit adequate to(p) operations (Mann & Roberts, 2007). Further, the FDDs help the franchisees to have intercourse whether the franchisor is financially stable currently for them to increase or decrease their investment in the latter. A list of current franchisees with their current attains is also important as the franchisees or prospective franchisees can use the information to contact others inquiring about their experience with the franchisor (Mann & Roberts, 2007). ... Given this fact, Rolando and Rosa will have to share all its financial and accounting records with its subsequent franchisees to ensure smooth operation of its moving in (Baldwin, et al., 2011). Importance of completing balance sheets and direct statements on a periodic and yearly basis Completing balance sheets and operating statements on monthly and yearly basis by the Hair department store is vital the firm will be able to determine its profitability at any given month franchisor will be able t o know whether through its franchising operations, it has the ability to earn profits or incur loses (Baldwin, et al., 2011). For the firm to be in business it must be able to earn profits. According to these facts, completing balance sheets and operation statements on monthly and annual basis will help the Hair Emporium understand whether it is earning profits or incur loses within the said periods. Secondly, the Hair Emporium will understand its liquidity for instance, the company will know its ability to meet both its short-term and long-term financial obligations. Consequently, completing balance sheets and operating statements on monthly and yearly basis will help the Hair Emporium to know how efficient it is in delivering services. For instance, how productive the firm is utilizing its assets relative to its revenue and its profits (Baldwin, et al., 2011). In the same line of discussion, the Hair Emporium will be able to understand its financial stability the firms overall fin ancial strength will be established through these monthly and yearly checks. The firm will also use the completed monthly and yearly financial statements to estimate its future income and expenses based on