How is the interest rate determined for loans made by Dq Treat to BH Finance LLC?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
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(A Wholly Owned Subsidiary of Berkshire Hathaway Inc.) Notes to Consolidated Financial Statements
In thousands
1. NATURE OF BUSINESS
International Dairy Queen, Inc. (the "Company") is a wholly owned subsidiary of Berkshire Hathaway Inc. ("Berkshire"). The Company is engaged in developing, licensing, franchising, and servicing a system of approximately 7,700 retail restaurants featuring over-the-counter sales of dairy desserts, food, and blended fruit drinks. On December 31, 2024 and 2023, the Company operated two Dairy Queen restaurants.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation—The consolidated financial statements were prepared in accordance with generally accepted accounting principles (GAAP) in the United States of America and incl
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 the 2025 Dq Treat Franchise Disclosure Document, Dq Treat participates in a centralized cash management program with BH Finance LLC, a wholly-owned subsidiary of Berkshire. This agreement allows for day-to-day cash borrowing not exceeding $10 million, with no limit on invested amounts with BH Finance.
Loans from Dq Treat to BH Finance bear interest at a rate established by BH Finance. Conversely, loans to Dq Treat bear interest at the one-month SOFR rate. The agreement automatically renews on December 31 of each year unless either party provides a notice of termination at least ninety days prior to the renewal date, in which case the amounts must be repaid.
For a prospective franchisee, this arrangement is important to understand because it outlines how Dq Treat manages its cash flow with its affiliates. While franchisees are not directly involved in this cash pooling arrangement, it provides insight into the financial relationships within the Dq Treat organization. Understanding these relationships can help franchisees assess the financial stability and practices of the franchisor.