What were the management fees for Bevaris Alliance in 2022?

According to Bevaris Alliance's 2024 Franchise Disclosure Document, the company was charged management fees of $96,000 in 2022. These fees were part of an informal management agreement with the company's member. In 2023, the management fees charged to Bevaris Alliance increased significantly to $486,000.

This information is found within the notes to the financial statements, specifically concerning related party transactions. It indicates that the company's member (owner) was compensated for managing the business, although the agreement was informal. The substantial increase in management fees from 2022 to 2023 could be due to various factors, such as increased responsibilities, improved financial performance of the company, or a formalization of the management agreement.

For a prospective franchisee, this highlights the importance of understanding related-party transactions and how management fees are determined. It would be prudent to inquire about the specifics of the management agreement, the services provided in exchange for these fees, and the rationale behind the significant increase in fees between the two years. Understanding these details can provide a clearer picture of the company's financial management and its relationship with its owner.

It is also important to note that the FDD states that Bevaris Alliance, Inc. (BAI), an affiliate owned by the member of the Company, paid legal, professional fees, and other costs related to establishing the Company and developing the franchise network on behalf of the Company. BAI is also a franchisee of the Company. Franchise fees incurred by BAI and payable to the Company during 2023 and 2022 were $99,547 and $72,226, respectively.