Does Coffee News have any intercompany transactions or balances?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
stments are publicly traded, measured at fair market value on a recurring basis and considered level 1.
9. Capital Stock
Coffee News USA has authorized 3,000 shares and 2,000 issued no par shares.
10. Related Party Transactions
The Company provides corporate vehicles to shareholders. Operating personnel are salaried employees. In addition,
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to Coffee News's 2025 Franchise Disclosure Document, there are no intercompany transactions or balances. However, Coffee News USA purchased printing services from Coffee News Printing, a business with one owner in common. The payments for these printing services totaled $7,545 in 2024, $7,257 in 2023, and $8,380 in 2022.
This arrangement means that while Coffee News USA and Coffee News Printing are separate legal entities, they have a common owner, creating a related-party transaction. While there are no intercompany transactions or balances, franchisees should be aware of the relationship between Coffee News USA and Coffee News Printing, LLC, as franchisees are required to purchase printing services from Coffee News Printing, LLC for a minimum of one year from the date of the Franchise Agreement. After the first year, the franchisee has the option to use another print shop, unless Coffee News USA provides financing to purchase a minimum of four franchised units. In that case, the franchisee must continue to use Coffee News Printing, LLC for the term of the loan.
Prospective franchisees should consider the implications of this required relationship, including whether the pricing and service terms offered by Coffee News Printing are competitive. It is important to evaluate whether this arrangement benefits both the franchisor and the franchisee, or if it primarily benefits the franchisor due to the captive nature of the business. Understanding the costs and terms associated with these related-party transactions is crucial for assessing the overall financial viability of a Coffee News franchise.