Are there any set repayment terms for the note receivables from the sole stockholder of Carbones Pizzeria?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
pany'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 f
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, as of October 31, 2023, the company had note receivables from its sole stockholder amounting to $492,605. These receivables do not have set repayment terms and are due on demand. Additionally, the note is unsecured and noninterest bearing.
This arrangement signifies that the stockholder can delay repayment indefinitely, as there are no fixed payment schedules or interest charges. The absence of a defined repayment plan introduces uncertainty regarding when and how Carbones Pizzeria will recover this substantial amount.
For a prospective franchisee, this related-party transaction highlights a potential financial risk. The franchisee should consider the implications of a significant asset being tied up in a demand note with the sole stockholder, as it could affect the company's financial flexibility and ability to invest in the franchise system. It would be prudent to inquire about the stockholder's repayment intentions and the potential impact on the company's operations and growth plans.