As of December 31, 2023, how much was Craters & Freighters owed from Craters & Freighters Platinum?
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 Craters & Freighters' 2025 Franchise Disclosure Document, as of December 31, 2023, Craters & Freighters was owed $356,391 from Craters & Freighters Platinum. This related-party transaction arises because of common ownership between the two entities. Craters & Freighters provides shared services and occasionally advances funds to Craters & Freighters Platinum.
Because these borrowings are considered short-term, Craters & Freighters does not charge interest on the outstanding balance. This arrangement suggests a close financial relationship between the two companies, where Craters & Freighters provides support to Craters & Freighters Platinum through shared services and short-term financing.
Prospective franchisees should be aware of these related-party transactions, as they can impact the financial statements of Craters & Freighters. While the FDD provides this specific figure, it's important for potential franchisees to understand the nature and extent of all related-party transactions and how they might affect the overall financial health and stability of the franchise system. Further due diligence and inquiry with the franchisor are advisable to fully understand these relationships.