What was the amount of Dq Treat's cash pooling receivable from affiliate in 2023?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
gregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
- Obtain an understanding of internal control relevant
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, the cash pooling receivable from affiliate was $55,807 in 2023. Dq Treat participates in a centralized cash management program with BH Finance LLC, an affiliate. This arrangement allows for cash borrowing up to $10 million and investing with BH Finance.
The cash pooling agreement between Dq Treat and BH Finance LLC involves loans that bear interest. Loans to Dq Treat accrue interest at the one-month SOFR rate, while loans from Dq Treat to BH Finance bear interest at a rate set by BH Finance. The agreement renews automatically each December 31 unless either party provides a 90-day notice to terminate, at which point all amounts must be repaid.
For a prospective franchisee, this indicates that Dq Treat engages in significant financial transactions with its affiliates. The cash pooling arrangement could impact Dq Treat's financial stability and its ability to support its franchisees. It is important to note that the interest rates on loans to and from the affiliate are determined differently, which could present a financial risk or benefit to Dq Treat. Franchisees may want to inquire about the details of this cash management program and its potential effects on the franchise system's financial health.