What was the total amount of Dermani Medspa's long-term liabilities?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
head), a related entity wholly owned by the sole member of the Company, made advances in the amount of $20,000 to the Company. The funds were provided by Buckhead to meet current obligations and will be repaid as funds become available. The advance from Buckhead is non‐interest bearing and has been classified as a long‐term liability in the accompanying balance sheet because there is no requirement for the funds to be repaid during the next year. The balance as of December 31, 2022 was $20,000.
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2022
5. RELATED PARTY ACTIVITY (CONTINUED)
In 2022, dermani Sandy Springs, a related entity wholly owned by the sole member of the Company, made advances in the amount of $30,000 to the Company. The funds were provided by Sandy Springs to meet current obligations and will be repaid as funds become available. The advance from Sandy Springs is non‐interest bearing and has been classified as a long‐term liability in the accompanying balance sheet because there is no require
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the company had long-term liabilities resulting from advances made by related entities in 2022. Specifically, dermani Buford, a related entity wholly owned by the sole member of the company, made advances of $50,000 to Dermani Medspa. Similarly, dermani Vinings, also a related entity wholly owned by the sole member, advanced $30,000 to the company. These funds were provided to meet current obligations and are to be repaid as funds become available.
These advances from Buford and Vinings are non-interest bearing and are classified as long-term liabilities because there is no requirement for the funds to be repaid within the next year. The balances as of December 31, 2022, were $50,000 and $30,000, respectively. Therefore, the total long-term liabilities for Dermani Medspa stemming from these advances amounted to $80,000 as of December 31, 2022.
For a prospective franchisee, this indicates that Dermani Medspa has relied on related-party financing to meet its obligations. While the terms are favorable (non-interest bearing), it is important to understand the company's financial strategy and its ability to generate sufficient cash flow to repay these liabilities. A franchisee should inquire about the repayment schedule and the company's plans for managing its debt obligations in the future.