Does City Publications charge interest on the advances made to its affiliates?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
$ 1,413,271 | $ 1,272,502 | $ 1,140,467 |
Estimated Recognition of Deferred Franchise Fees
Estimated revenues and franchise acquisition costs to be recognized in future periods related to deferred franchise fees reported as of December 31, 2024, is as follows:
| Non-refundable Franchise Fees | ||
|---|---|---|
| Year ending December 31: | ||
| 2025 | $ | 29,393 |
| 2026 | 22,613 | |
| 2027 | 17,940 | |
| 2028 | 11,880 | |
| $ | 81,826 |
NOTE 3 – RELATED PARTY TRANSACTIONS
During the year ended December 31, 2024, 2023, and 2022, the Company provided management and advertising services the Company's
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the company does not charge interest on advances made to its affiliates. Specifically, during the years ended December 31, 2024, 2023, and 2022, City Publications advanced $145,012, $67,140, and $50,894, respectively, to support its affiliate operations. As of December 31, 2024, and 2023, the total advances due from affiliates were $1,994,105 and $1,849,093, respectively.
These advances bear no interest, meaning the affiliates are not charged any additional fees for the use of these funds. Furthermore, there are no specified repayment terms for these advances. This arrangement is classified as a component of shareholders' equity (or deficit), indicating that these affiliates are under common control through common ownership with City Publications.
For a prospective franchisee, this information is relevant in understanding the financial relationships between City Publications and its related entities. While this specific detail might not directly impact the franchisee's day-to-day operations, it provides insight into the overall financial structure and management practices of the City Publications franchise system. Understanding these related-party transactions can contribute to a more comprehensive assessment of the franchise's financial health and stability.