What was the amount due from related parties for Expense Reduction Analysts in 2022?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
8, respectively, for these services. As of December 31, 2024 and 2023, the Company owed ASNS $3 and $264,660, respectively, for these services. The amounts are included in Due to Related Parties within the current liabilities portion of the balance sheet.
The Company provided significant technology support and development functions to affiliates in other countries and management services to a local affiliate, Southwest Cost Strategies. Management services were $676,000 and $667,500 for the years ended December 31, 2024 and 2023, respectively. The Company was owed $1,024,215 and $997,500 at December 31, 2024 and 2023, respectively, to reflect these costs, resources, and services. These services are performed in the ordinary course of business and are therefore classified as current assets. Further, the receivables are backed by the parent company in the event the related party is unable to satisfy their obligation.
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, the company was owed $857,412 from related parties in 2022. These amounts reflect the costs, resources, and services Expense Reduction Analysts provided to affiliates in other countries and management services to a local affiliate, Southwest Cost Strategies.
Specifically, these services include significant technology support and development functions to affiliates in other countries and management services to Southwest Cost Strategies. For the year ending December 31, 2022, management services totaled $470,000. The $857,412 owed to Expense Reduction Analysts is classified as current assets on the balance sheet, indicating they are expected to be collected within a year.
The FDD also states that the receivables are backed by the parent company, providing a level of security in the event the related party is unable to fulfill their obligation. Expense Reduction Analysts will periodically assess whether an allowance for current expected credit losses is needed; however, as of December 31, 2022, an allowance for expected credit losses for related party accounts was not deemed necessary.
Prospective franchisees should be aware of these related party transactions as they can impact the financial health and stability of Expense Reduction Analysts. Understanding the nature and extent of these transactions, as well as the safeguards in place, can help franchisees assess the financial risks and opportunities associated with the franchise.