How does the Affiliate allocate expenses to Eos Worldwide under the expense sharing agreement?
Eos_Worldwide Franchise · 2025 FDDAnswer from 2025 FDD Document
y is no longer subject to tax examinations by the U.S. federal, state or local tax authorities for the years before 2019.
Management evaluation subsequent events: The Company has performed an evaluation of subsequent events through March 24, 2025, which is the date the financial statements were available to be issued.
Note 2. Related-Party Transactions
The Company has entered into an expense sharing agreement with the Affiliate. The Affiliate pays all expenses on behalf of the Company and allocates expenses, including payroll, advertising, information technology, interest and other operating expenses, to the Company based on the terms stipulated in the expense sharing agreement.
The Affilia
Source: Item 22 — CONTRACTS (FDD page 74)
What This Means (2025 FDD)
According to the 2025 Eos Worldwide Franchise Disclosure Document, Eos Worldwide has an expense sharing agreement with an affiliate. The affiliate handles the payment of all expenses on behalf of Eos Worldwide. These expenses include payroll, advertising, information technology, interest, and other operating expenses.
The FDD states that the affiliate allocates these expenses to Eos Worldwide based on terms stipulated in the expense sharing agreement. However, the specific terms of the expense sharing agreement that dictate how these allocations are determined are not detailed in this document.
The affiliate may offset these expenses against any amounts it collects on behalf of Eos Worldwide. The remaining balance is then transferred in cash between Eos Worldwide and the affiliate periodically for cash flow purposes. As of December 31, 2024, approximately $5,711,000 was outstanding and due from the Affiliate under this arrangement.