What specific period does the 2022 receipts data cover for Cinch I.T. in this table?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
and fees for 2021 have been recognized as annual conference revenue in 2022.
4. RELATED PARTY TRANSACTIONS (Continued)
Revenues (continued)
During the years ended December 31, 2022 and 2021, the Company also collected annual conference fees of $2,500 and $3,200, respectively from a related party. Worcester Interactive LLC. The fees for 2022 are included in deferred revenue and fees for 2021 have been recognized as annual conference revenue in 2022.
Expenses
Worcester Interactive LLC provides web hosting, maintenance, and advertising services to the Company. The Company had expenses totaling $46,925 and $35,850 for these services during the years ended December 31, 2022 and 2021, respectively.
In 2021, the Company began paying rent to a related party, WIK Investments LLC, for its facilities. The Company is a tenant-at-will. Rent expense totaled $24,000 and $3,000 for the years ended December 31, 2022 and 2021, respectively.
In 2021, the Company began paying management fees to Cinch IT, Inc. Management fees totaled $75,000 for the years ended December 31, 2022 and 2021.
5. OTHER INCOME - CARES ACT
The Company applied for and was awarded a forgivable loan of $17,997 in 2020 from the Paycheck Protection Program (PPP) established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The funds were used to pay certain payroll costs, including benefits, as well as utilities, during a 24-week period (the covered period) as defined in the CARES Act. All or a portion of these funds may be forgiven, as defined in the loan agreement, at the end of the covered period and any unforgiven funds will be due over a two-year period with interest at one percent.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the receipts data for 2022 pertains to the year ending December 31, 2022. Specifically, this data relates to related party transactions, including annual conference fees collected and expenses for services provided by Worcester Interactive LLC, as well as rent expenses paid to WIK Investments LLC and management fees paid to Cinch IT, Inc.
For a prospective Cinch I.T. franchisee, this information is relevant for understanding the financial relationships and transactions between the company and related parties. It provides insight into the types of expenses the company incurs and the revenue it generates from these relationships. Understanding these related party transactions can help a franchisee assess the financial stability and transparency of Cinch I.T.
The FDD also mentions a forgivable loan of $17,997 that the company was awarded in 2020 under the CARES Act, which was forgiven in June 2021. This indicates the company's ability to leverage government assistance programs during times of economic uncertainty. While this specific loan relates to a past event, it demonstrates the company's resourcefulness in managing its finances.
Overall, the receipts data provides a snapshot of Cinch I.T.'s financial activities with related parties and its handling of financial challenges and opportunities. A potential franchisee should review these figures carefully to gain a comprehensive understanding of the company's financial practices.