Why are the financial statements of AB Inc. included in the Benjamin Franklin Plumbing FDD?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
As described in Item 1, AB Inc. provides support and services to BENJAMIN FRANKLIN PLUMBING franchisees under a management agreement with us. AB Inc. was formerly known as Villa BidCo, Inc. until the company changed its name on May 17, 2021. We have included in Exhibit I the audited consolidated financial statements of AB Inc. and subsidiaries which comprise the consolidated balance sheets as of December 31, 2024, and December 31, 2023 and the related consolidated statements of comprehensive loss, of changes in stockholder's equity and of cash flows for the three years then ended December 31, 2024. These financial statements are included for disclosure purposes only; AB Inc. is not a party to the Franchise Agreement we sign with franchisees, nor does it guarantee our obligations under the Franchise Agreement we sign with franchisees.
As part of the Securitization Transaction described in Item 1, certain subsidiaries of AB Inc., including us, have guaranteed the indebtedness incurred in connection with the Securitization Transaction. Please see the footnotes and supplements to the financial statements in Exhibit I for more information about the Securitization Transaction.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 87)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, the financial statements of AB Inc. are included for disclosure purposes because AB Inc. provides support and services to Benjamin Franklin Plumbing franchisees through a management agreement. AB Inc. also acts as the franchise sales agent for Benjamin Franklin Plumbing. The FDD states that Benjamin Franklin Plumbing pays management fees to AB Inc. for these services. AB Inc. was formerly known as Villa BidCo, Inc. until it changed its name on May 17, 2021.
Despite the inclusion of AB Inc.'s financial statements, the FDD explicitly states that AB Inc. is not a party to the Franchise Agreement that Benjamin Franklin Plumbing signs with its franchisees. Furthermore, AB Inc. does not guarantee Benjamin Franklin Plumbing's obligations under the Franchise Agreement. This distinction is important for prospective franchisees to understand, as it clarifies the limited role of AB Inc. in the direct contractual relationship between the franchisor and franchisee.
Additionally, the FDD mentions that certain subsidiaries of AB Inc., including Benjamin Franklin Plumbing, have guaranteed indebtedness related to a Securitization Transaction. More detailed information about this transaction can be found in the footnotes and supplements to the financial statements in Exhibit I of the FDD. This information is relevant for prospective franchisees as it provides insight into the financial structure and obligations of Benjamin Franklin Plumbing and its affiliated entities.