What were the total royalty, training, equipment sales, and other franchise-related revenues that Stretch Zone earned from franchise stores owned by its Parent company for the year ended December 31, 2023?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
t estimate of when the underlying revenue will be recognized.
NOTE E - RELATED PARTY TRANSACTIONS
The Company earns revenues for royalties, training, equipment sales, and other franchise-related transactions from certain franchise stores that are owned by the Parent. Revenues for the years ended December 31, 2024 and 2023 include $84,771 and $89,260, respectively, from these stores. Total payments received from these franchises during the years ended December 31, 2024 and 2023 totaled $82,681 and $91,858, respectively, and $12,648 and $10,558 were receivable from these franchises as of December 31, 2024 and
Source: Item 3 — Franchisee/Debtor's Warranties. (FDD pages 263–364)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, the company earned revenues of $89,260 for the year ended December 31, 2023, from royalties, training, equipment sales, and other franchise-related transactions from certain franchise stores that are owned by its Parent company. Total payments received from these franchises during the year totaled $91,858, and $10,558 was receivable from these franchises as of December 31, 2023. This receivable amount is included in due from related parties on the accompanying balance sheets.
This indicates that Stretch Zone has financial relationships with its parent company through franchise operations. The revenue generated from these related-party transactions is a component of Stretch Zone's overall financial performance. Franchisees should be aware of these related-party transactions, as they could potentially influence the franchisor's decisions and priorities.
Prospective franchisees should consider the nature and extent of these related-party transactions when evaluating the financial health and stability of Stretch Zone. Understanding how these transactions are structured and managed can provide insights into the franchisor's business practices and potential conflicts of interest. It is important to assess whether these transactions are conducted at arm's length and on terms that are fair to all parties involved, including franchisees.