What was the change in due from related parties for 1-800-GOT-JUNK? for the period ended May 31, 2024?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
May 31 May 31
Cash provided by (used in):
Operating: Net income for the period
$ 288,999 $ 266,526 Items not involving cash: Amortization 9,288 20,952 Deferred income tax expense 59,707 32,952 Current income tax expense 25,716
Interest accrued for due to related parties 303,956 178,974 Bad debt
145,077 Income taxes paid (292,897) (69,581)
394,769 574,900 Changes in non-cash operating items: Accounts receivables 1,907,548 10,838,454 Due from related parties (1,340,526) (444,834) Prepaid expenses 237,174 13,745 Short-term investment (1,044) (538) Accounts payable and accrued liabilities (3,290,212) (541,944) Payable to franchisees (1,059,187) (10,075,702) Deferred revenue (37,475) (78,096) Due to related parties 5,710,937 2,797,879 Deposits 50,000
Withholding tax payable 226,407 (11,710)
2,798,391 3,072,154
Source: Item 21 — Financial Statements (FDD page 56)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, the 'Due from related parties' decreased by $444,834 for the period ended May 31, 2024. This figure is derived from the Consolidated Statements of Cash Flows, which outlines the changes in various non-cash operating items.
'Due from related parties' represents the money owed to 1-800-GOT-JUNK? by its affiliated entities. A decrease in this balance suggests that related parties paid down some of their outstanding debts to 1-800-GOT-JUNK? during this period. This can be a positive sign, indicating improved financial health among the related entities and a better cash flow position for 1-800-GOT-JUNK? itself.
For a prospective franchisee, understanding these related-party transactions is crucial. It provides insight into the financial relationships between 1-800-GOT-JUNK? and its affiliates, which can impact the overall stability and performance of the franchise system. While a decrease in 'Due from related parties' can be seen as favorable, it's important to consider the broader context of these transactions and their potential implications for the franchisee's business.