What are the payment terms for notes receivable that Craters & Freighters may issue to franchisees?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
31, 2024 and 2023, respectively.
At the Company's discretion, unpaid franchisee balances may be converted to a note receivable with payment terms between twenty-four and thirty-six months, accruing interest at six percent. As of December 31, 2024, there was $16,991 in outstanding notes receivable from franchisees relating to unpaid balances, of which $11,662 is due within one-year and $5,329 is due in 12-24 months. As of December 31, 2023, there were no Franchisee accounts with past due balances converted to notes receivable. Default on notes receivable will result in a termination of the related franchise agreements b
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to the 2025 FDD, Craters & Freighters may convert unpaid franchisee balances into notes receivable at their discretion. These notes have payment terms that range between 24 and 36 months. The notes accrue interest at a rate of 6%.
As of December 31, 2024, Craters & Freighters had $16,991 in outstanding notes receivable from franchisees. Of this amount, $11,662 was due within one year, and $5,329 was due in 12-24 months. In contrast, as of December 31, 2023, there were no franchisee accounts with past due balances converted to notes receivable.
It's important to note that defaulting on these notes receivable will result in the termination of the franchise agreement between Craters & Freighters and the franchisee. This highlights the importance of franchisees maintaining timely payments to avoid potential financial and contractual repercussions.