Are advances to and from the Member of Chatime interest-bearing?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
ified as noncurrent liabilities. There were no amounts due to affiliates at December 31, 2023.
Due to/from member
In the ordinary course of business, the Company periodically advances funds to and receives funds from the Member of the Company. No interest is charged on these advances. Advances to and from the Member are noninterest bearing and have no specific date for repayment. The balance due from Member amounted to $20,108 and $300,000 at December 31, 2024 and 2023, respectively. Management expects these balances to be settled within the next year. The balance due to Member amounted to $60,015 and $- at De
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, advances between Chatime Franchise LLC and its Member, Chatime Global LLC, are not subject to interest. These advances represent funds that the company periodically provides to or receives from its Member in the normal course of business operations. The FDD specifies that these advances are noninterest bearing and lack a specific repayment date.
As of December 31, 2024, the balance due from the Member to Chatime Franchise LLC was $20,108, while the balance due to the Member was $60,015. In the previous year, December 31, 2023, the balance due from the Member was $300,000, and there was no balance due to the Member. Chatime's management anticipates that the balance due from the Member will be settled within the next year, while the balance due to the Member is not expected to be settled within the same timeframe.
This arrangement indicates a financial relationship where Chatime Franchise LLC and its Member engage in fund transfers without accruing interest. For a prospective franchisee, this detail provides insight into the financial management and inter-company transactions within the Chatime franchise system. Understanding these related-party transactions can help franchisees assess the financial stability and operational practices of the franchisor.