How are dollar values presented in the consolidated financial statements related to Benjamin Franklin Plumbing?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
ented. Centralized payment arrangements, to the extent not settled, are reflected as due to Guarantor on the consolidated balance sheets. As of December 31, 2024 and 2023, there are no amounts due to Guarantor but rather, for the years ended December 31, 2024, 2023 and 2022, the Company made periodic distributions in excess of the amounts due to Guarantor. Net distributions in the amount of $73,049, $68,651 and $69,644 are reflected in the consolidated statements of changes in member's equity as distribution to Guarantor for the years ended December 31, 2024, 2023 and 2022, respectively.
Parent provides a variety of services to the Company. The consolidated statements of operations include direct expenses, such as compensation and benefits for employees of the Company, that would have been incurred in the ordinary course of business if the Company had operated as a stand-alone company. Such direct expenses were included based on specific identification and are reflected primarily in franchise support expenses. The consolidated statements of operations also include expense allocations for services and certain support functions that are provided on a centralized basis by Parent such as legal, business development, human resources, corporate accounting and finance, treasury and various other Parent corporate functions. These parent expenses are allocated by either specific identification or based on revenue of the Company relative to the Parent's other subsidiaries and are reflected in the consolidated
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to the 2025 FDD, the consolidated statements of operations for Benjamin Franklin Plumbing include direct expenses, such as employee compensation and benefits, that would occur in the normal course of business. These direct expenses are specifically identified and primarily reflected in franchise support expenses. The consolidated statements also include allocated expenses for centralized services provided by the Parent company, such as legal, business development, human resources, corporate accounting, finance, treasury, and other corporate functions. These parent expenses are allocated either through specific identification or based on the revenue of Benjamin Franklin Plumbing relative to the Parent's other subsidiaries, and are primarily reflected in general and administrative expenses.
For the years ending December 31, 2024, 2023, and 2022, the Parent allocated $11,931, $10,739, and $10,191, respectively, in general and administrative expenses to Benjamin Franklin Plumbing. Additionally, the Parent allocated stock-based compensation expenses of $1,848, $3,817, and $4,409 for the same years, respectively. Of these stock-based compensation expenses, $1,113, $2,453, and $3,181 were specifically identified by unit holder, while $735, $1,364, and $1,228 were allocated based on revenue.
These allocations are important for prospective franchisees to understand as they reflect the true cost of services provided to Benjamin Franklin Plumbing by its Parent company. Understanding how these expenses are allocated can help franchisees assess the financial performance and profitability of their franchise, as well as the overall financial health of the Benjamin Franklin Plumbing franchise system. Franchisees should refer to Note 12 in the FDD for further details on these allocations.