How are common expenses allocated to Marble Slab Creamery from FAT Brands Inc. and its subsidiaries?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
eceives either a credit or a deduction for foreign withholding taxes paid on its U.S. federal and state income tax returns for these foreign taxes paid.
NOTE 5. RELATED PARTY TRANSACTIONS
FAT Brands Inc.'s operations are structured in such a way that significant direct and indirect administrative functions are provided to the Company. These services included operational personnel to sell franchise rights, assist with training franchisees and assisting franchises with opening restaurants. FAT Brands Inc. also provides executive administration and accounting services for the Company.
Management reviewed the expenses recorded at the parent companies and identified the common expenses that should be allocated to the subsidiaries. These expenses were allocated based on an estimate of management's time spent on the activities of the subsidiaries, and further allocated pro rata among the subsidiaries based on each subsidiary's respective revenues as a percentage of overall revenues of the subsidiaries.
The expenses are included in general and administrative expenses on the consolidated statements of operations. Due from affiliates as of December 31, 2023 represents the net amount due from GFG Royalty and FAT Brands Inc.
During the fiscal years ended December 29, 2024, the Company determined amounts due from its affiliates were, and wil
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 100–101)
What This Means (2025 FDD)
According to Marble Slab Creamery's 2025 Franchise Disclosure Document, FAT Brands Inc. provides significant administrative functions to its subsidiaries, including Marble Slab Creamery. These services encompass operational personnel who sell franchise rights, assist with franchisee training, and aid franchisees in opening restaurants. Additionally, FAT Brands Inc. offers executive administration and accounting services.
To allocate these common expenses, management reviews the expenses recorded at the parent companies and identifies those that should be allocated to the subsidiaries. The allocation is based on an estimate of management's time spent on subsidiary activities. Subsequently, these expenses are further allocated pro rata among the subsidiaries. This proration is based on each subsidiary's respective revenues as a percentage of the overall revenues of all subsidiaries.
These allocated expenses are then included in general and administrative expenses on the consolidated statements of operations for Marble Slab Creamery. The amount due from affiliates as of December 31, 2023, represents the net amount due from GFG Royalty and FAT Brands Inc. For the fiscal years that ended December 29, 2024, the company determined that amounts due from its affiliates were permanent and would not be recovered, resulting in a $16.3 million distribution from affiliates during that fiscal year. This allocation method ensures that Marble Slab Creamery bears its share of the costs associated with the services it receives from its parent company and affiliates.