What is the ending balance in 'payables to affiliates' in Atwell Suites' consolidated balance sheets, and how are these amounts subsequently recorded?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
rk. This was superseded on January 1, 2019 by a one-year agreement with automatic one-year extension periods unless either party gives the other notice to terminate. The royalty payment under these agreements of $3.2 million, $3.0 million and $2.8 million was recognized as a deduction to fee business revenue i
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to Atwell Suites' 2025 Franchise Disclosure Document, the ending balance in 'payables to affiliates' in the consolidated balance sheets is $0. These amounts are then recorded as nonshareholder capital contributions.
This means that any outstanding amounts owed to affiliated entities at the end of the reporting period are cleared out and reclassified as contributions to the company's capital, rather than remaining as liabilities on the balance sheet. This accounting treatment can impact the company's financial ratios and overall financial presentation.
For a prospective Atwell Suites franchisee, this detail from the financial statements provides insight into how the company manages its related-party transactions and how it accounts for its obligations to affiliates. Understanding these accounting practices can help franchisees assess the financial health and stability of the franchisor.