Does the Cinch I.T. FDD state that related parties may provide services to the company?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
31, 2021, the Company also collected annual conference fees of $3,200 from a related party. Worcester Interactive LLC. These fees are included in deferred revenue.
Expenses
Worcester Interactive LLC provides web hosting, maintenance,
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, related parties do provide services to the company. Specifically, Worcester Interactive LLC provides web hosting, maintenance, and advertising services to Cinch I.T.
During the year ending December 31, 2021, Cinch I.T. had expenses of $35,850 for these services from Worcester Interactive LLC. In the previous year, for the year ending December 31, 2020, the expenses totaled $59,355. This demonstrates a financial relationship where a related party is compensated for providing essential services to Cinch I.T.
For a prospective franchisee, this information is relevant because it shows that Cinch I.T. engages in transactions with related parties, which could potentially affect the company's financial performance and the franchisee's business operations. It is important to understand the nature and terms of these related-party transactions to assess their impact on the overall franchise system.