For Fat Shack, what was the outstanding balance of the note receivables at December 31, 2024?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
nuary 1, 2019.
4. NOTES RECEIVABLE
During the year ended December 31, 2022, the Company executed one additional note receivable loan agreement with an unrelated third-party franchisee totaling $75,000. These notes require monthly principal payments through maturity, ranging from September 1, 2023 to January 27, 2026. In lieu of interest, these notes require a payment of 1% of the third party's franchise gross sales for every month that the note has an outstanding balance. The total amounts of these loans are not typically advanced to the third party in a lump sum. Instead, the Company begins paying for franchise start-up expenses on behalf of the third party upon execution of the agreement. The loans are collateralized by substantially all assets of the franchise owned by the third party. The outstanding balance of the note receivables at December 31
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the outstanding balance of the note receivables at December 31, 2024, was $701,287. The FDD also provides the outstanding balance of the note receivables for the prior two years. The outstanding balance at December 31, 2023, was $479,960, and the outstanding balance at December 31, 2022, was $528,900.
These notes receivable stem from loan agreements Fat Shack executed with third-party franchisees in 2022. These loans require monthly principal payments with maturity dates ranging from September 1, 2023, to January 27, 2026. Instead of interest, Fat Shack requires a payment of 1% of the franchisee's gross sales for every month the note has an outstanding balance.
It's important to note that the total amounts of these loans are not typically advanced to the third party in a lump sum. Instead, Fat Shack begins paying for franchise start-up expenses on behalf of the third party upon execution of the agreement. These loans are secured by substantially all assets of the franchise owned by the third party, which protects Fat Shack in case of default.