What was the amount of Dq Treat's cash pooling receivable from affiliate in 2024?
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 to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the
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 its affiliate, BH Finance LLC, was $44,559 in 2024. This receivable represents the amount owed to Dq Treat under a centralized cash management program where Dq Treat participates with BH Finance, a subsidiary of Berkshire. The agreement allows for day-to-day cash borrowing up to $10 million, with no limit on invested amounts.
Loans to Dq Treat from BH Finance accrue interest at the one-month SOFR rate, while loans from Dq Treat to BH Finance accrue interest at a rate established by BH Finance. This arrangement automatically renews annually unless either party provides a 90-day notice before the renewal date, in which case the amounts must be repaid.
For a prospective franchisee, this indicates that Dq Treat engages in significant financial transactions with its affiliates. It also shows that Dq Treat recognized interest income from BH Finance of $2.6 million for the year ending December 31, 2024. Understanding these related-party transactions and the cash management practices is important for assessing the financial stability and practices of Dq Treat.