What was the interest rate on the employee loan provided by Craters & Freighters in 2022?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
During the year ended December 31, 2023, the Company traded in property and equipment with a net book value of $97,271 for a reduction in price of new property and equipment. The Company recognized a gain of $15,729.
Note 9: Due to Shareholder
In December 2023, the Shareholder provided the Company $5,000,000 to fund future investments. As of December 31, 2023, the Shareholder has taken $2,230,312 in distributions which has been offset against the Shareholder advance. As of December 31, 2023, $2,769,688 remains as outstanding Due to Shareholder. This loan has an interest rate of 2.95% and matures January 1, 2026. There are no payments due on the advance until January 1, 2025. As a result the balance will be considered long term.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for Craters & Freighters does not specify the interest rate for any employee loans made during 2022. The document does reference a loan from a shareholder in December 2023 of $5,000,000 to fund future investments, which had an interest rate of 2.95%.
While the document does not provide the specific interest rate for employee loans in 2022, it does detail related-party transactions and loans, including those with shareholders. This suggests that Craters & Freighters engages in various financing activities that could be relevant to a franchisee's understanding of the company's financial practices.
A prospective Craters & Freighters franchisee should inquire directly with the franchisor about the terms and conditions of any employee loans issued in 2022, as well as the general policies and practices regarding financial assistance to employees. Understanding these practices can provide a more complete picture of the company's financial culture and risk management.