What was the amount of accounts receivable from related parties for Big Blue Swim School in 2024?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
tions.
NOTE 9. RELATED-PARTY TRANSACTION
Related-party transactions
The Company's largest developer is an affiliated entity through common ownership. Accordingly, in the normal course of business, the Company regularly executes franchise agreements with the affiliated developer pursuant to a development agreement. As a result of these transactions, revenues from these related-party franchises amounted to $609,741, $1,471,387 and $900,039 for each of the years in the three-year period ended December 31, 2024, respectively, and are included in ''Revenues'' in the accompanying statements of operations and member's deficit. Receivables from these related-party franchises amounted to $1,947 and $88,618 as of December 31, 2024 and 2023, respectively. These amounts are included
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 75)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, the amount of accounts receivable from related-party franchises was $1,947 as of December 31, 2024. This amount is included in "Accounts receivable - related party" on the balance sheets. A related party is defined as an affiliated entity through common ownership, specifically the company's largest developer.
In practical terms, this means that a portion of Big Blue Swim School's revenue is tied to transactions with entities that share ownership. For a prospective franchisee, this highlights the importance of understanding the financial relationships between Big Blue Swim School and its affiliates. It's essential to evaluate how these related-party transactions might affect the overall financial health and stability of the franchise system.
It's also worth noting that the revenues from these related-party franchises amounted to $609,741 for the year ended December 31, 2024. This indicates that transactions with related parties constitute a significant portion of Big Blue Swim School's overall revenue. Prospective franchisees should inquire about the terms and conditions of these related-party transactions to ensure they are conducted at arm's length and do not create any conflicts of interest.
In comparison, the receivables from these related-party franchises amounted to $88,618 as of December 31, 2023, which is significantly higher than the $1,947 reported for December 31, 2024. This decrease could be due to a variety of factors, such as changes in payment terms or a reduction in the volume of transactions with related parties. A prospective franchisee should seek clarification from Big Blue Swim School regarding the reasons for this decrease and its potential implications for the franchise system.