What was the amount due from related parties for Ledgers in 2023?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
doubt about Loyalty Business Services, LLC's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Bernard Robinson & Company, I.S.P.
Raleigh, North Carolina April 28, 2025
${\bf LOYALTY; BUSINESS; SERVICES,; LLC; (FORMERLY; FIDE; HOLDING,; LLC)}$
Balance Sheets
December 31, 2024, 2023 and 2022
| 2 | Assets | ||||||
|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | |||||
| Current Assets: | S | ||||||
| Cash and cash equivalents | $ 424,085 | $ 181,077 | $ 264,411 | ||||
| Royalty receivables | 3,190 | 3,302 | - | ||||
| Notes receivable, current | 40,760 | 229,901 | |||||
| Total Current Assets | 427,275 | 225,139 | 494,312 | ||||
| Non-Current Assets: | |||||||
| Notes receivable, less current portion | = | 634,000 | |||||
| Due from related parties | 630,180 | 1,229,516 | 1,320,815 | ||||
| Deferred tax asset | 715,000 | 611,000 | 513,000 | ||||
| Total Non-Current Assets | 1,345,180 | 1,840,516 | 2,467,815 | ||||
| Total Assets | $ 1,772,455 | $ 2,065,655 | $ 2,962,127 | ||||
| Liabilities and Members' Equity | |||||||
| Current Liabilities: | |||||||
| Accounts payable | $ 15,010 | $ 15,010 | $ 125,974 | ||||
| Accrued expenses | 4,755 | 9,975 | 5,152 | ||||
| Due to related parties | 852,180 | 737,180 | 305,000 | ||||
| Deferred revenue - current | 24,000 | 94,000 |
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the amount due from related parties in 2023 was $1,229,516. This figure represents the balance of transactions between Ledgers and its related entities, typically involving short-term advances and cost reimbursements. These transactions are part of the company's ordinary course of business.
For a prospective franchisee, understanding related-party transactions is crucial because these transactions can affect the financial health and transparency of Ledgers. A high amount due from related parties might indicate complex financial relationships or potential risks if these amounts are not properly managed or collected. Franchisees should be aware that such transactions could influence the company's financial stability and, consequently, the support and services it can provide to its franchisees.
It is important for potential franchisees to investigate the nature of these related-party transactions. Understanding the terms, repayment schedules, and the parties involved can provide a clearer picture of the company's financial practices. Consulting with a financial advisor or attorney to review these aspects of the FDD can help in assessing the potential impact on the franchise investment.
In summary, while related-party transactions are not inherently negative, their magnitude and nature require careful scrutiny. Franchisees should seek detailed explanations from Ledgers regarding these transactions to ensure they understand the associated risks and benefits before making a final investment decision.