Does Spray Net charge interest on advances to or from related parties?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
ES TO THE FINANCIAL STATEMENTS
5. BRAND FUND
The Company maintains a brand fund established to collect and administer funds contributed for use in advertising and promotional programs for franchise units. Advertising fees are collected from franchisees based on a percentage of franchisee gross revenues. Brand fund liability for the years ending December 31, 2024, 2023 and 2022 were $0 and $0 and $80,280 respectively.
6. PRIOR YEAR ADJUSTMENT
A restatement to the year ended December 31, 2022, financ
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the company does not charge interest on advances to or from related parties. The FDD indicates that these advances are due upon demand and do not bear interest. As of December 31, 2024, the balance due to related parties was $0, remaining the same as in 2023, and decreasing from $76,268 in 2022. The balances due from related parties were $69,911 as of December 31, 2024, $121,956 in 2023, and $0 in 2022.
For a prospective Spray Net franchisee, this means that any financial transactions between Spray Net and its members or related companies do not involve interest charges. This could be seen as a benefit, as it simplifies financial dealings between the company and its related parties. However, the franchisee should be aware of the amounts due to and from related parties, as these balances can fluctuate and may reflect the financial health or management practices of the company.
It is important for potential franchisees to understand the nature of these related party transactions and how they might impact the overall financial stability of Spray Net. While the absence of interest charges may seem favorable, franchisees should still conduct thorough due diligence to assess the implications of these transactions on the company's financial statements and operations.