What was the amount of Cinnaholic's related party payable in 2024?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
$32,921, respectively. Future minimum lease payments under the lease total $37,210, of which $31,858 is due during the year ending December 31, 2022, and $5,352 is due during the year ending December 31, 2023. Starting from March 2023, the minimum rent is $2,757 monthly.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 61)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the balance due to a related party was $520,959 as of December 31, 2024. These advances from related parties or companies with common ownership bear no interest and are payable upon demand. In 2023, the balance due to a related party was $377,838.
This indicates that Cinnaholic relies on related-party transactions for its financing. A 'related party' could be an owner, immediate family member of an owner, or another entity that has some control or influence over Cinnaholic. The related party payable increased from 2023 to 2024.
For a prospective franchisee, this information highlights the importance of understanding Cinnaholic's financial stability and its relationships with related parties. It is important to investigate the nature of these related party transactions, the terms of repayment, and the potential impact on the franchise system. While related party transactions are not inherently bad, they can create conflicts of interest or raise concerns about the company's governance and financial practices. A franchisee should seek clarification from Cinnaholic regarding these transactions and their potential impact on the franchisee's business.