What interest rate did the loan from ERA International MIC bear for Expense Reduction Analysts?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
gher than what would be expected if the federal statutory rate were applied to income before income taxes primarily because of certain expenses deductible for financial reporting purposes that are not tax deductible.
NOTE 9 RELATED PARTY TRANSACTIONS
During 2006, the Company received a loan from ERA International MIC (which was subsequently acquired by MIC) totaling $734,000. The note bore interest at 1.75% per annum and contained no fixed repayment terms, and the loan was repaid during 2008. The Company owes MIC a total of $101,078 for accrued interest payable at December 31, 2024 and 2023 on this loan. The Company
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, a loan that Expense Reduction Analysts received from ERA International MIC in 2006 bore an annual interest rate of 1.75%. The loan totaled $734,000 and had no fixed repayment terms. The loan was repaid during 2008.
However, Expense Reduction Analysts still owed MIC $101,078 for accrued interest payable as of December 31, 2024, and December 31, 2023, related to this loan. Expense Reduction Analysts also owed MIC $136,451 and $430,431 at both December 31, 2024 and 2023, respectively, for unpaid royalties and other advances. These amounts are classified as 'Payable to Related Party' within the long-term liabilities section of the balance sheet.
This related-party transaction indicates that Expense Reduction Analysts has financial dealings with entities related to its ownership. Prospective franchisees should carefully examine these related-party transactions to understand the full financial picture of Expense Reduction Analysts and how these relationships might affect the franchise system.