For C3 Wellness Spa, how are non-cash Practice Expenses determined and when are they paid?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
- (b) Non-Cash Expenses. All non-cash Practice Expenses (e.g., depreciation and amortization) will be determined monthly in accordance with GAAP and paid contemporaneously with the payment of the Management Fee.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, non-cash practice expenses, such as depreciation and amortization, are determined monthly in accordance with Generally Accepted Accounting Principles (GAAP). These expenses are paid at the same time as the management fee.
For a prospective franchisee, this means that non-cash expenses, which do not involve an actual outflow of cash, are calculated each month following standard accounting practices. This ensures consistency and accuracy in financial reporting.
The fact that these expenses are paid contemporaneously with the management fee suggests that they are factored into the overall financial management and payment structure between the franchisee (Practice) and the manager. This arrangement provides clarity and predictability in the franchisee's financial obligations.