Does the note receivable from the sole stockholder of Carbones Pizzeria bear interest?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
sks associated with estimates of future taxable income, and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance.
As of October 31, 2024, the Company's returns are subject to examination by federal and state taxing authorities, generally for three years and four years, respectively, after they are filed.
3. Related Party Transactions
Due from stockholder
The Company has note receivables from its sole stockholder in the amount of $519,028 as of October 31, 2024. This balance has no set repayment terms, is due on demand, unsecured and noninterest bearing.
Notes to Consolidated Financial Statements For the Year Ended October 31, 2024
**3.
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the note receivable from its sole stockholder does not bear interest. As of October 31, 2024, the company had note receivables from its sole stockholder in the amount of $519,028. The note has no set repayment terms, is due on demand, unsecured, and noninterest bearing.
This arrangement is categorized as a related party transaction, specifically between Carbones Pizzeria and its sole stockholder. Related party transactions are not inherently problematic, but they require careful scrutiny to ensure they are conducted at arm's length and are fair to all parties involved, including potential franchisees. The fact that the note is noninterest bearing could raise questions about whether the company is forgoing potential income.
For a prospective franchisee, this information highlights the importance of understanding the financial relationships between Carbones Pizzeria and its owners. While the note receivable from the stockholder may not directly impact the operations of a franchised location, it provides insight into the company's overall financial management and its dealings with related parties. It would be prudent for a potential franchisee to seek clarification from Carbones Pizzeria regarding the purpose of the note, the rationale for it being noninterest bearing, and its potential impact on the company's financial stability.
It is also worth noting that the company leases a facility from a limited liability company owned by the same stockholder. This arrangement further emphasizes the significance of related party transactions within Carbones Pizzeria and the need for transparency and due diligence on the part of prospective franchisees.