What was the total amount due from a related party to Mr. Sandless at the end of 2021?
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 $3
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 41–42)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, the balance due from a related party to Mr. Sandless as of December 31, 2021, was $110,000. These advances are funds that Mr. Sandless periodically advances to its members or related companies. The advances are due on demand and do not bear interest.
This type of related-party transaction is not uncommon in franchise systems, especially those that are privately held. It is important to note that these transactions can create potential conflicts of interest, so it's essential for a prospective franchisee to understand the nature and extent of these transactions.
As a potential franchisee, it would be prudent to inquire about the specific related parties involved, the purpose of these advances, and the repayment history. Understanding these details can help assess the financial stability and transparency of Mr. Sandless.