What was the total amount of advances taken on the Bevaris Alliance line of credit during 2023?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
,107) | | Deferred franchise development costs - net | $ 52,517 | $ 67,172 |
Amortization expense for 2023 and 2022 were $14,656 and $6,107, respectively.
5. CREDIT CARD PAYABLE:
The Company maintains a credit card with a credit card provider. The aggregate credit limit for this credit card is $20
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 FDD, Bevaris Alliance maintained a line of credit of $40,000 with a finance company. The interest rate on this line of credit was 59.9% per annum. During 2023, the company took advances of $2,000 and made payments of $1,000 on this line of credit. As of December 31, 2023, the outstanding balance on the line of credit was $1,000.
For a prospective Bevaris Alliance franchisee, this indicates that the franchisor utilizes a line of credit to manage its finances. The high interest rate of 59.9% suggests that the company may be considered a higher-risk borrower. The fact that advances were taken and payments were made during the year shows active management of this credit line.
It's important to note that the line of credit activity only included advances of $2,000, while payments totaled $1,000, resulting in a net increase of $1,000. This information provides insight into the franchisor's financial management and how they utilize credit to support their operations. A potential franchisee should consider this information when evaluating the financial stability and practices of Bevaris Alliance.