What was the amount of proceeds and collections from the parent company for Afuri Ramen Dumpling in 2021?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
and provide the initial training program, among others.
NOTE 4. RELATED PARTY TRANSACTIONS
The Company recorded management fees of $175,279 and $98,000, during the years ended December 31, 2021 and 2020, respectively. The fees include management, consulting, and accounting wages, franchisee training, as well as office rent, insurance, and utilities.
The Company had an $80,000 unsecured note with a related party, Afuri Japan, in which $20,000 annual payments were scheduled to be made with an annual interest rate of 1.4%, maturing in 2024. The Company repaid the note in 2021. Interest paid totaled $2,004 and $0 for the years ended December 31, 2021 and 2020, respectively.
NOTE 5. CONCENTRATIONS OF RISK
The Company had seven and six franchisees that accounted for 100% of the revenue for the year ended December 31, 2021 and 2020, respectively.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the company recorded management fees of $175,279 during the year ended December 31, 2021. These fees encompass management, consulting, and accounting wages, franchisee training, office rent, insurance, and utilities.
Additionally, in 2021, Afuri Ramen Dumpling repaid an $80,000 unsecured note to a related party, Afuri Japan. This note had an annual interest rate of 1.4%, with annual payments of $20,000 scheduled until its maturity in 2024. The interest paid on this note totaled $2,004 for the year ended December 31, 2021.
It is important to note that seven franchisees accounted for 100% of the revenue for Afuri Ramen Dumpling during the year ended December 31, 2021. Furthermore, four franchisees accounted for 93% of the accounts receivable balance as of December 31, 2021. This concentration of revenue and accounts receivable among a small number of franchisees indicates a potential risk for prospective franchisees, as the financial health of Afuri Ramen Dumpling is heavily reliant on the success of these specific franchisees.