Where are Craters & Freighters royalty rebates included in the financial statements?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
mber 31, 2024 and 2023.
Franchisees are eligible to participate in various royalty rebate programs. The rebate programs operate on an annual basis and each rebate is distributed to franchisee within 45 days following the year-end if the franchisee has met all eligibility requirements, as defined. Requirements include timely payment of royalties and submission of all reporting requirements as outlined in the underlying franchise agreement. The Company estimates royalty rebates payable totaling approximately $1,072,297 and $981,420 for the years ended December 31, 2024 and 2023, respectively. Royalty rebates are include
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, royalty rebates are accounted for as "accounts payable" in the company's financial statements. Franchisees are eligible for these rebates if they meet specific requirements, such as timely royalty payments and fulfilling all reporting obligations outlined in the franchise agreement.
The FDD indicates that Craters & Freighters estimates the royalty rebates payable. For the year ending December 31, 2024, the estimated rebates totaled approximately $1,072,297, and for the year ending December 31, 2023, the estimated amount was approximately $981,420. These rebates are distributed to franchisees within 45 days following the year-end, provided they meet all eligibility criteria.
This accounting treatment means that prospective Craters & Freighters franchisees can find information about royalty rebates under the "accounts payable" section of the company's balance sheet. Understanding the eligibility requirements and the timing of these rebates is crucial for franchisees to manage their cash flow and financial planning effectively. The estimates provided give an idea of the potential scale of these rebates, although the actual amount a franchisee receives will depend on their individual performance and compliance with the franchise agreement.