Is the note receivable from the sole stockholder of Carbones Pizzeria secured or unsecured?
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. Related Party
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, the note receivable from the sole stockholder is unsecured. As of October 31, 2024, the company has note receivables from its sole stockholder in the amount of $519,028. This balance has no set repayment terms, is due on demand, unsecured, and noninterest bearing.
This means that Carbones Pizzeria has extended credit to its sole stockholder, and this debt is not backed by any specific collateral. In the event of default, Carbones Pizzeria would be considered an unsecured creditor, putting them at a lower priority for repayment compared to secured creditors who have a claim on specific assets.
For a prospective franchisee, this related party transaction highlights the importance of understanding the financial relationships between Carbones Pizzeria and its stakeholders. While such transactions are not uncommon, franchisees should carefully evaluate the potential impact on the financial stability and operations of the franchise system. It is important to note that the company also leases a facility from a limited liability company owned by the stockholder.