What were the proceeds from the issuance of a note payable to a related party for Better Blend?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
| Net loss | $ (307,811) |
|---|---|
| Adjustments to reconcile net loss to net cash | |
| flows used by operating activities: | |
| Changes in operating assets and liabilities: | |
| Royalties and marketing receivable | (3,659) |
| Deposits | (5) |
| Accounts payable and accrued expenses | 50,589 |
| Deferred revenue | 185,083 |
| Cash flows used by operating activities Cash flows from financing activities | (75,803) |
| - | 49,220 |
| Proceeds from issuance of note payable to related party | 49,220 |
| Cash flows provided by financing activities | 49,220 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the proceeds from the issuance of a note payable to a related party totaled $49,220. This note payable is categorized as cash flow from financing activities.
In simpler terms, Better Blend Franchising, LLC received $49,220 through a loan or similar financial instrument from a related entity. This related party is under common control, as detailed elsewhere in the FDD. The funds are considered part of the company's financing activities, which are distinct from its operating activities (like royalties and franchise fees) or investing activities.
For a prospective franchisee, this indicates that Better Blend has engaged in financing activities with related parties. While not inherently negative, it's prudent to understand the terms of such notes payable, including interest rates (even if stated as non-interest bearing), repayment schedules, and the nature of the relationship with the related party. This information helps assess the financial stability and practices of Better Blend.