Does Craters & Freighters charge interest on the outstanding balance owed by Craters & Freighters Platinum, and why or why not?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
security agreement.
Note 6: Related Party Transactions
The Company provides shared services and advances to a related party, Craters & Freighters Platinum, through common ownership. Total amounts paid to the Company for shared services during the year ended December 31, 2024 totaled $175,268, of which, $41,921 is shown in the financial statements as a reduction of rent expense. During the year ended December 31, 2023 total amounts paid to the Company for shared services totaled $307,386, of which, $17,386 is shown in the financial statements as a reduction of rent expense. As of December 31, 2024 and 2023, the Company was owed $0 and $356,391, respectively from Craters & Freighters Platinum. Due to the short-term nature of these b
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, Craters & Freighters provides shared services and advances to Craters & Freighters Platinum, a related party through common ownership. As of December 31, 2024, Craters & Freighters was owed $0 from Craters & Freighters Platinum. In the previous year, as of December 31, 2023, the amount owed was $356,391.
Craters & Freighters does not charge interest on the outstanding balance owed by Craters & Freighters Platinum. The reason for this is that these borrowings are considered short-term in nature.
This related-party transaction is disclosed in the financial statements to provide transparency about the financial relationships between Craters & Freighters and its related entities. Prospective franchisees should be aware of these relationships and how they might affect the overall financial health of the company. Understanding these transactions can help franchisees assess the stability and financial practices of Craters & Freighters.