What was the total amount of the reversion and reacquisition agreement that Expense Reduction Analysts entered into during 2024?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE 5 INTANGIBLE ASSETS (CONTINUED)
The franchise and insurance license rights are tested for impairment at least annually or whenever events or changes in circumstances indicate the carrying value may not be fully recoverable.
NOTE 6 NOTES PAYABLE
During 2024, the Company entered into a reversion and reacquisition agreement for a total of $201,897. Beginning on January 5, 2025, the Company will pay the purchase price in 36 equal, consecutive monthly installments of $2,804 each at 0% interest, with the final payment due December 5, 2027.
During 2021, the Company entered into a reversion and reacquisition agreement for a total of $300,000.
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, the company entered into a reversion and reacquisition agreement in 2024 for a total of $201,897. The payment plan stipulates that Expense Reduction Analysts will make 36 equal, consecutive monthly installments of $2,804 each, without interest, beginning on January 5, 2025, and ending on December 5, 2027.
This agreement represents a financial obligation for Expense Reduction Analysts, which prospective franchisees should consider when evaluating the company's financial health. Understanding the terms of such agreements, including the payment schedule and interest rates, is crucial for assessing the franchisor's financial stability and its ability to support its franchisees.
Additionally, the FDD mentions a previous reversion and reacquisition agreement from 2021 for $300,000, which was fully paid by December 31, 2024. This indicates that Expense Reduction Analysts has experience with such agreements and has successfully managed these financial obligations in the past. Reviewing the company's history of similar transactions can provide insights into their financial management practices.