Are the advances to and from related parties by Gold Star interest-bearing?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company also has advances to and from related parties at December 31, 2024, 2023 and 2022. The advances are non-interesting bearing and have occurred within the normal course of business. There are no set repayment terms for the advances. All are eliminated upon consolidation.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the advances to and from related parties are non-interest bearing. These advances occur within the normal course of business, and there are no set repayment terms for the advances. All of these advances are eliminated upon consolidation.
This means that Gold Star engages in financial transactions with related entities, but these transactions do not accrue interest. For a prospective franchisee, this indicates that Gold Star's financial structure involves inter-company transactions that are simplified by the absence of interest charges and are considered routine for the business.
The lack of set repayment terms might introduce some uncertainty, but the consolidation of these advances suggests they are managed internally and do not represent external debt obligations. Franchisees should be aware of these related-party transactions as they provide insight into the overall financial management and structure of Gold Star.