What was the amount of advances to related party for Crisp & Green in 2023?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
| BALANCE - DECEMBER 31, 2020 | $ 1,205,873 |
|---|---|
| Net Income | 1,737,797 |
| Distributions | (915,859) |
| BALANCE - DECEMBER 31, 2021 | 2,027,811 |
| Net Income | 3,881,136 |
| Distributions | (2,971,018) |
| BALANCE - DECEMBER 31, 2022 | 2,937,929 |
| Net Income | 4,444,324 |
| Distributions | (4,510,497) |
| BALANCE - DECEMBER 31, 2023 | $ 2,871,756 |
CRISP & GREEN FRANCHISING LLC STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2023, 2022, AND 2021
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net Income | $ 4,444,324 | $ 3,881,136 | $ 1,737,797 |
| Adjustments to Reconcile Net Income to Net Cash | |||
| Provided by Operating Activities: | |||
| Changes in Operating Assets and Liabilities: | |||
| Accounts Receivable | 1,644,628 | (1,420,263) | (658,819) |
| Deferred Costs | 158,797 | (1,078,419) | (2,247,000) |
| Accounts Payable | 32,312 | 2,136 | - |
| Deferre |
Source: Item 23 — RECEIPTS (FDD pages 66–252)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, the advances to related party in 2023 were $(1,009,101). This figure represents the cash outflows from investing activities related to transactions with related parties.
For a prospective franchisee, 'advances to related party' typically refers to loans or payments made by the franchisor to entities or individuals affiliated with the franchisor, its management, or its owners. These transactions are not necessarily problematic but require careful scrutiny to ensure they are conducted at arm's length and do not unfairly benefit the related parties at the expense of the franchise system.
The FDD includes this information to provide transparency into the financial dealings of Crisp & Green. Franchisees should review these figures in the context of the overall financial health of the company. Significant or increasing advances to related parties could signal potential conflicts of interest or financial instability, while stable and reasonable amounts may be less concerning. It is important to note that these are cash outflows, meaning that Crisp & Green was investing in related parties during this period.
Prospective franchisees should seek clarification from Crisp & Green regarding the nature of these related-party transactions, the terms of any advances, and the safeguards in place to prevent abuse or conflicts of interest. Understanding these transactions is a crucial part of assessing the financial risks and opportunities associated with investing in a Crisp & Green franchise.