Where can I find more information about Bath Tune Up's related party transactions with its Parent?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
es' contributions subject to certain limitations. The Company contributed $128,663 for the year ended December 31, 2022, which is included in operating and administrative expenses on the accompanying statement of earnings.
9. Related Party Transactions
Certain operating expenses are incurred by the Parent company and are allocated to the Company. During the year ended December 31, 2022, the Company's Parent allocated $2,822,097 in expenses to the Company which was charged to the Company's operations, with most of the expenses included in operating and administrative expenses, on the accompanying statement of earnings.
At December 31, 2022, the Company had a net payable due from its Parent in the amount of $6,119,658 which resulted from various intercompany transactions. These amounts are presented as a component of equity in the accompanying balance sheet.
Notes to Financial Statements
**10.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 51–52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, details regarding related party transactions between Bath Tune Up and its Parent company, Home Franchise Concepts, LLC, can be found in Note 9 of the financial statements for the year ended December 31, 2022. Additionally, Note 7 of the financial statements provides further information regarding parental operating expense allocation. These notes are integral to understanding the financial relationship between Bath Tune Up and its Parent.
Specifically, Note 9 indicates that certain operating expenses are incurred by the Parent company and then allocated to Bath Tune Up. For the year ending December 31, 2022, the Parent allocated $2,822,097 in expenses to Bath Tune Up, which were charged to Bath Tune Up's operations and primarily included in operating and administrative expenses. Furthermore, as of December 31, 2022, Bath Tune Up had a net payable due from its Parent in the amount of $6,119,658, resulting from various intercompany transactions. These amounts are presented as a component of equity in the accompanying balance sheet.
Note 7 elaborates that the operating expenses allocated from the Parent to Bath Tune Up cover services such as legal, IT, finance, marketing, and human resources. These expenses are allocated based on the percentage of overall gross profit contributed to the Parent. Reviewing these related party transactions is crucial for a prospective franchisee to understand the financial dependencies and obligations between Bath Tune Up and its Parent company, as these transactions can significantly impact the franchisee's financial performance and the overall financial health of the franchise system.