What was the balance due *from* a related party to Mr. Sandless as of December 31, 2023?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
rect services, as deferred revenues, to be recognized over the life of the franchise agreement. The non-refundable franchise fees received but not yet earned as of December 31, 2023, and 2022, were $435,000 and $360,810, respectively.
**5.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 41–42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, as of December 31, 2023, the balance due from a related party to Mr. Sandless was $64,122. The FDD notes that Mr. Sandless periodically advances funds to its members or related companies, and these advances are due on demand and bear no interest. In the previous year, as of December 31, 2022, the balance due from a related party was $82,500.
This indicates that related parties owed Mr. Sandless $64,122 as of the end of 2023. These related party transactions are common in franchise systems, where the franchisor may have financial relationships with its owners, subsidiaries, or other affiliated entities. The fact that these advances are due on demand and bear no interest suggests that they are intended to be short-term in nature.
For a prospective franchisee, this information provides insight into Mr. Sandless's financial dealings with related parties. While such transactions are not inherently problematic, it is important to understand the nature and extent of these relationships. A franchisee may want to inquire about the specific related parties involved, the purpose of the advances, and the repayment history to ensure that these transactions do not pose any financial risks to the franchise system. Understanding the details of these related party transactions can help a franchisee assess the overall financial health and stability of Mr. Sandless.