From whom does Crawlspace Medic rent office space?

According to Crawlspace Medic's 2024 Franchise Disclosure Document, the company rents its office space from 1049 2nd Avenue, LLC. This entity is identified as a partnership owned by the members of Crawlspace Medic. The rent expense is determined by allocating the cost based on the square footage of office space utilized by the company.

This arrangement constitutes a related-party transaction, as the owners of Crawlspace Medic directly benefit from the rent payments. While the FDD states that these transactions occur at arm's length, prospective franchisees should be aware of the potential for conflicts of interest. It is important to verify that the rental rates are consistent with market rates for comparable office space to ensure fairness and transparency.

Furthermore, the FDD indicates that franchisees owed Crawlspace Medic $14,844, $10,472, and $4,610 as of December 31, 2022, 2021, and 2020, respectively, for fees collected for corporate offices. This suggests that Crawlspace Medic may collect fees from franchisees to cover the costs of maintaining corporate offices, which are then paid as rent to the related-party landlord. Franchisees should seek clarification on how these fees are calculated and allocated to ensure they are reasonable and justified.