What was the total amount of security deposits for Mr. Sandless as of December 31, 2023?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
thod starting with January 1, 2020.
MR. SANDLESS FRANCHISE, LLC NOTES TO FINANCIAL STATEMENTS
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4. DEFERRED FRANCHISE FEES
In compliance with the Financial Accounting Standards Board ("FASB") new accounting standards for revenue recognition ("Topic 606"), the Company records its non-refundable franchise fees, 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, 2023, and 2022, were $435,000 and $360,810, 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, 2023, and 2022, the balance due from a related party was $
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 41–42)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the financial statements for Mr. Sandless do not explicitly list a line item for 'security deposits' as of December 31, 2023. The financial documentation does highlight several key financial figures for that period. These include deferred franchise fees of $435,000, which represents non-refundable franchise fees received but not yet earned. Additionally, the balance due from a related party was $64,122, while the amount due to a related party was $0 as of the same date. These figures provide insight into the company's financial obligations and transactions with related entities.
Prospective franchisees should be aware that the absence of a specific 'security deposits' line item does not necessarily mean that such deposits do not exist. It is possible that these deposits are accounted for under a different category or are not material enough to warrant a separate line item in the financial statements. Understanding how Mr. Sandless handles and accounts for security deposits is crucial for assessing the overall financial health and transparency of the franchise system.
To gain a clearer understanding, potential franchisees should directly inquire with Mr. Sandless about the existence, purpose, and accounting treatment of any security deposits collected from franchisees. Specifically, they should ask whether security deposits are required, the typical amount of such deposits, under what circumstances these deposits might be used or forfeited, and how they are reflected in the company's financial statements. This due diligence will help in making an informed decision about investing in a Mr. Sandless franchise.
Furthermore, it would be prudent to consult with a financial advisor or accountant to review the financial statements and related disclosures in detail. This expert can provide an independent assessment of the financial risks and opportunities associated with the Mr. Sandless franchise, taking into account the specific accounting practices and financial performance of the company.