What is the difference in related party receivables between 2022 and 2023 for Bens Soft Pretzels?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
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BEN'S SOFT PRETZELS FRANCHISING CORPORATION STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2024, 2023, and 2022
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Cash flows from operating activities | |||
| Net income | $ 338,260 | $ 262,767 | $ 325,475 |
| Adjustments to reconcile net income to net | |||
| cash provided by operating activities | |||
| Depreciation | 54,160 | 49,812 | 29,526 |
| Gain on sale of asset | (33,000) | - | - |
| ERC grant income | - | - | (6,027 |
| (Increase) decrease in assets | |||
| Accounts receivable, net | (138,340) | 8,305 | (66,654 |
| Franchise fees receivable | 6,000 | 19,000 | (34,000 |
| Related party receivables | 65,070 | (27,995) | (346,005 |
| Rebates receivable | 6,998 | (5,090) | (2,796 |
| Other current assets | (5,031) | (22,512) | 4,494 |
| Increase (decrease) in liabilities | |||
| Accounts payable | (12,562) | (8,191) | 24,844 |
| Accounts payable - related parties | 7,643 | (1,044) | 6,508 |
| Gift cards payable | 1,292 | 5,198 | 5,392 |
| Accrued salaries and wages | 5,469 | 4,667 | 1,503 |
| Accrued property tax | 600 | 7,500 | - |
| Deferred revenue and rebates | 43,708 | (47,358) | 40,935 |
| Other current liabilities | 1,608 | - | - |
| Net cash from operating activities | 341,875 | 245,059 | (16,805 |
| Cash flows from investing activities | |||
| Purchase of property and equipment | (52,360) | (329,093) | (101,578 |
| Net cash from investing activities | (52,360) | (329,093) | (101,578 |
| Cash flows from financing activities | |||
| Proceeds from long-term debt | - | 247,200 | - |
| ERC grant proceeds | - | - | 6,027 |
| Principal payments on long-term debt | (21,768) | (20,751) | (12,048 |
| Distributions | (212,385) | (121,663) | (55,884 |
| Net cash from financing activities | $ (234,153) | $ 104,786 | $ ( |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 FDD, Bens Soft Pretzels' related party receivables decreased by $361,357 from 2022 to 2023. In 2022, the related party receivables were ($346,005), and in 2023, they were ($27,995). This calculation is derived from the cash flow statement, which shows these figures as negative values, indicating a decrease in assets or an increase in liabilities related to transactions with related parties.
Related party transactions are common in franchise systems, often involving loans, royalties, or other financial dealings between the franchisor and its affiliates or owners. The decrease in receivables could mean that related parties paid off outstanding debts to Bens Soft Pretzels, or that the company reduced the amount of credit or financial support it extended to these related entities. Understanding the nature of these related party transactions is crucial for assessing the financial health and stability of Bens Soft Pretzels.
A prospective franchisee should investigate the details behind these related party transactions. It would be prudent to ask Bens Soft Pretzels for a detailed breakdown of these receivables, including the specific entities involved, the nature of the transactions, and the terms of repayment. This due diligence will help a franchisee understand the potential impact of these transactions on the franchisor's financial performance and its ability to support its franchisees.