According to Counselor Realty's 2025 Franchise Disclosure Document, the expenses allocated to the company by its parent company, Counselor Holding, Inc., are considered related-party transactions. These expenses are based on the usage of certain system tools and employees. For the years ending December 31, 2024, 2023, and 2022, the total expenses allocated to Counselor Realty were $37,278, $34,342, and $41,038, respectively.

Related-party transactions are common in franchise systems where a parent company provides services or resources to its subsidiaries. It is important for prospective franchisees to understand the nature and extent of these transactions because they can impact the financial performance of the franchise. In this case, Counselor Realty receives allocated expenses from its parent company, which affects its profitability.

Franchisees should consider whether the allocated expenses are reasonable and justified. Understanding the basis for these allocations (usage of system tools and employees) is crucial. A potential franchisee should inquire about the specific services and resources covered by these allocations and how they benefit the franchise operation.

It is also worth noting that the financial statements have been audited by an independent auditor, Baker Tilly US, LLP, which provides some assurance that the related-party transactions are fairly presented. However, franchisees should still conduct their own due diligence to assess the financial implications of these transactions.