What was the total amount of Cinnaholic's related party payable on December 31, 2023?
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 total amount payable to related parties as of December 31, 2023, was $377,838. These payables represent advances Cinnaholic received from related parties or companies with common ownership. These advances are notable because they do not bear interest and are payable upon demand, which could create some uncertainty regarding Cinnaholic's financial obligations.
For a prospective franchisee, this related party payable is an important figure to consider. It represents a liability that Cinnaholic has to its related parties. While the terms are favorable (no interest, payable upon demand), a large balance could indicate a reliance on related parties for funding.
It's also worth noting that the balance due to related parties increased from $316,838 in 2022 to $377,838 in 2023 and further to $520,959 in 2024. This trend might suggest an increasing reliance on related-party funding, which a potential franchisee should investigate further to understand the reasons behind this increase and its potential implications for the financial stability of Cinnaholic.