What was the amount due from related party for Lees Famous Recipe as of December 31, 2024?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
e employees may defer up to the maximum amount allowed by the Internal Revenue Service. The Company may make matching and discretionary contributions to the plan. For the years ended December 31, 2024, 2023, and 2022, employer contributions to the plan totaled $244,669, $180,337, and $95,233, respectively.
NOTE 9 - RELATED PARTY TRANSACTIONS
Advertising Services:
During the years ended December 31, 2024, 2023, and 2022, the Company realized revenue from Lee's Famous Recipe Advertising Cooperative, Inc. for administrative services provided by LFR Chicken totaling $360,000, $360,000, and $309,165, respectively. The Company had accounts payable due to Lee's Famous Recipe Advertising Cooperative, Inc. of $62,390 and $31,022 at December 31, 2024 and 2023, respectively.
There was no revenue realized from LFRC OH Adverting Cooperative, Inc. during the years ended December 31, 2024, 2023, and 2022. The Company had accounts payable due to LFRC OH Adverting Cooperative, Inc. of $13,997 and $9,364 at December 31, 2024 and 2023, respectively.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 69)
What This Means (2025 FDD)
According to the 2025 FDD, Lees Famous Recipe had several related party transactions. As of December 31, 2024, the company had accounts payable due to Lee's Famous Recipe Advertising Cooperative, Inc. of $62,390. Additionally, there were accounts payable due to LFRC OH Adverting Cooperative, Inc. of $13,997. Furthermore, amounts due to a law firm related by common ownership totaled $4,260.
These figures represent the amounts Lees Famous Recipe owed to these related entities for services provided. For a prospective franchisee, understanding these related-party transactions is crucial because it sheds light on the financial relationships Lees Famous Recipe has with other entities, which could influence the overall cost structure and operational dynamics of the franchise.
It is important to note that these payables are specifically for advertising and legal services. The FDD does not specify the terms for repayment of these amounts. A potential franchisee should inquire about the nature of these relationships, the services provided, and the payment terms to fully understand their financial implications.