What is the difference between the 'Due from related parties' assets of iTan in 2023 and 2024?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | |
|---|---|---|
| ASSETS | ||
| ASSETS | ||
| CURRENT ASSETS | ||
| Cash | $ 12,947 | $ 349,230 |
| Accounts receivable | 126,374 | 96,871 |
| Due from related parties (note 5) | 1,700,000 | 1,550,230 |
| Prepaid expenses | 13,426 | 9,196 |
| Prepaid taxes | 137,975 | - |
| Deferred tax asset (note 9) | 40,619 | 37,027 |
| 2,031,341 | 2,042,554 |
At December 31, 2024 and 2023, the Company had a $1,700,000 and $250,000 receivable, respectively, from KHI. This amount is a short-term loan and is reflected in due from related parties on the balance sheets.
For the years ended December 31, 2024 and 2023, $0 and $230, respectively, was due from Evolv and is reflected in due from related parties on the balance sheets.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the 'Due from related parties' asset account reflects the amounts due to Itan from entities related to the company. In 2024, this amount was $1,700,000, while in 2023, it was $1,550,230. This indicates an increase of $149,770 in the amount due from related parties from 2023 to 2024.
Specifically, the FDD mentions KHI, a former franchisee, as a related party. At the end of 2024 and 2023, Itan had $1,700,000 and $250,000 receivable, respectively, from KHI. This amount is classified as a short-term loan that does not accrue interest. Additionally, the FDD mentions Evolv, another related party, with $0 and $230 due from Evolv in 2024 and 2023, respectively.
For a prospective franchisee, this information is relevant because transactions with related parties can sometimes present conflicts of interest. It is important to understand the nature of these related-party transactions and their potential impact on Itan's financial health. Reviewing the notes to the financial statements and asking Itan for further details on these transactions would be a prudent step in assessing the franchise opportunity.