What were the other liabilities for Fast Fix Jewelry And Watch Repairs in 2023?
Fast_Fix_Jewelry_And_Watch_Repairs Franchise · 2025 FDDAnswer from 2025 FDD Document
e to state income taxes, net operating loss carrybacks, and goodwill amortization that is deemed non-deductible for tax reporting purposes.
Note 9. Related-Party Transactions
The Company has a management services agreement with the majority member of the Company. The member serves as an advisor and provides management services to the Company. Management fees were approximately $252,000 and $177,000 for the years ended December 31, 2023 and 2022, respectively. There were approximately $449,000 and $386,000 of unpaid management fees, included in accrued expenses on the consolidated balance sheets as of December 31, 2023 and 2022, respectively.
Jewelry Repair Enterprises, Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2023 and 2022
Note 10. Leases
The Company leases retail space in shopping centers for many corporate stores, as well as on behalf of certain franchisees, under non-cancelable operating leases. The leases expire at various dates through 2030. Certain lease agreements contain renewal options. For those leases, the Company included these renewal periods in the lease term if the Company determined it was reasonably certain to exercise the option. Lease payments during such renewal periods were also considered in the calculation of right-of-use assets and lease obligations. Fixed lease payments consist of base rent and operating expenses but do not include contingent rentals which may be required under certain leases based on sales more than stipulated minimums. Fixed lease expense under these agreements totaled approximately $568,000 and $1,001,000 for the years ended December 31, 2023 and 2022, respectively.
Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease obligations represent the Company's obligation to make lease payments arising from the lease. Lease obligations are recognized at the commencement date based on the present value of lease payments over the lease term. Right-of-use assets are recognized at the commencement date as the initial measurement of the lease liability, plus payments made prior to lease commencement and any initial direct costs. As the Company's leases do not provide an implicit rate, the Company elected to use its incremental borrowing rate at the commencement date in determining the present value of lease payments.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 37)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Fast Fix Jewelry And Watch Repairs had accrued expenses that included unpaid management fees of approximately $449,000 as of December 31, 2023. These fees were part of a management services agreement with the majority member of the company, who serves as an advisor and provides management services. The management fees for the year ended December 31, 2023, totaled approximately $252,000.
Additionally, Fast Fix Jewelry And Watch Repairs leases retail space in shopping centers for many corporate stores and on behalf of certain franchisees. The fixed lease expense under these agreements totaled approximately $568,000 for the year ended December 31, 2023. These leases expire at various dates through 2030 and may include renewal options. The company also had approximately $13,401,000 of operating lease liabilities on the consolidated balance sheet as of December 31, 2023.
In September 2022, Fast Fix Jewelry And Watch Repairs entered into a $5,300,000 senior term loan with a new financial institution. The loan bears interest at Prime Rate plus 9 percent, plus 1 percent Paid-In-Kind (PIK) interest that is compounded and added to the principal balance (17.5 percent at December 31, 2023). Monthly principal payments of approximately $69,000 are due with a balloon payment of the balance due upon maturity. The loan matures October 1, 2025. The company is subject to certain financial and non-financial covenants associated with the agreement.
In 2023, Fast Fix Jewelry And Watch Repairs recognized approximately $200,000 of Employee Retention Credit (ERC) income in other income (expenses). The company had applied for the ERC totaling approximately $482,000, which included credits for previous quarters. During 2022, the company received $375,000 in ERC income for quarters two, three and four of 2020 as well as quarter one and two of 2021. Approximately $175,000 reduced the receivable previously recognized on the consolidated balance sheet.