What were the members' contributions/distributions for Mr. Sandless in 2022?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
net of amounts earned based on allowable direct 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, 2022, and 2021, were $360,810 and $263,080, respectively.
5. RELATED PARTY TRANSACTIONS
The Company periodically advances funds to its members' or related companies. These advances are due on demand and bear no interest. As of December 31, 2022, and 2021, the
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 41–42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, the company periodically engages in related party transactions with its members. These transactions involve both advancing and receiving funds. These advances are due on demand and do not bear interest.
Specifically, as of December 31, 2022, Mr. Sandless had a balance due from a related party of $82,500. This indicates that the company had advanced this amount to its members or related companies, which was expected to be repaid on demand. Additionally, the amount due to a related party was $300, meaning Mr. Sandless owed this amount to its members or related companies.
These related party transactions can have implications for prospective franchisees. It's important to understand the nature and frequency of these transactions, as they can affect the company's financial stability and cash flow. While the amounts appear relatively small, consistent borrowing from or lending to related parties could signal potential financial management issues. A prospective franchisee should seek clarification from Mr. Sandless regarding the purpose and terms of these related party transactions to assess any potential risks.