What was the total amount of Cicis' related party receivable in 2022?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
ong other matters, the planned scope and timing of the audit, significant audit findings and certain internal control-related matters that we identified during the audit.
Dallas, Texas April 19, 2024
Combined Balance Sheets December 31, 2023 and 2022
| 2023 | 2022 | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 2,931,372 | $ 5,107,778 |
| Cash and cash equivalents—marketing fund, restricted | 771,794 | 432,296 |
| Accounts receivable, net: |
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 58–64)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the related party receivable in 2022 was $833,117. This receivable represents the amount due to Cicis from its related-party affiliates for services provided. These services include shared costs such as employee and personnel services, accounting and financial management, legal and tax, human resources, and information technology.
For a prospective franchisee, understanding related-party transactions is crucial because these transactions can impact the financial health and stability of the franchise system. A high related party receivable could indicate that affiliates are slow to pay for services, which might affect Cicis's cash flow.
It is important to note that the services provided to related-party affiliates are performed for an amount equal to the direct costs incurred by Cicis, plus allocated overhead costs based on management's estimation of services provided. This means that Cicis aims to recover its costs and a portion of overhead, but it is essential to verify that these allocations are fair and reasonable. Franchisees should consider asking Cicis for more details on how these costs are allocated and the terms of payment for these services to ensure transparency and avoid any potential conflicts of interest.