What was the total amount advanced by Bens Soft Pretzels to BSP LLC during 2020?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
- As of December 31, 2024, 2023, and 2022 a total of $0, $0 and $5,864 respectively, was outstanding and included in related party receivables.
During 2020, the Company advanced $34,000 to BSP LLC, an entity related through common ownership. The advance was used to assist in settling a cancelled lease agreement. The balance is due on demand and no interest is being charged on this balance. BSP LLC paid back $10,000 during 2020. BSP LLC paid back $5,414 during 2023. BSP LLC paid back $18,057 d
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 46)
What This Means (2025 FDD)
According to Bens Soft Pretzels' 2025 Franchise Disclosure Document, the company advanced a total of $34,000 to BSP LLC during 2020. BSP LLC is identified as an entity related to Bens Soft Pretzels through common ownership. The purpose of this advance was to assist BSP LLC in settling a cancelled lease agreement.
This type of related-party transaction is not uncommon in franchising, where a franchisor may have various affiliated entities. However, it's important for prospective franchisees to understand the nature of these transactions and how they might impact the financial health of the franchisor. The advance to BSP LLC is structured as a demand loan with no interest charged.
BSP LLC made partial repayments of the $34,000 advance. During 2020, BSP LLC repaid $10,000. Subsequent repayments included $5,414 in 2023 and $18,057 in 2024. As of December 31, 2024, the outstanding balance of the advance was $529. This information is relevant to assess the financial relationship between Bens Soft Pretzels and its related entities, as well as the ability of those entities to repay the advances.
Prospective franchisees should carefully review the financial statements and related notes in the FDD to understand the full scope of related-party transactions and their potential impact on the franchisor's financial condition. It would be prudent to inquire about the terms of these advances, the repayment schedules, and the potential risks associated with these transactions during the due diligence process.