How does Zoomin Groomin account for interest income from franchise notes receivable in its financial statements?
Zoomin_Groomin Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company has notes receivable from franchises based on financing provided by the Company to fund their initial purchase and/or provide working capital loans. The terms of the promissory note include a fixed interest rate of twelve percent (12%) annually and the notes have various due dates. Total interest income for the Company is reflected in the financial statements and included in income from operations.
Source: Item 9 — 01. Financial Statements and Exhibits. (FDD pages 68–156)
What This Means (2025 FDD)
According to Zoomin Groomin's 2025 Franchise Disclosure Document, the company provides financing to franchisees to fund their initial purchase and/or to provide working capital. These notes receivable from franchises carry a fixed interest rate of twelve percent (12%) annually and have various due dates. Zoomin Groomin includes the total interest income from these notes in its financial statements as part of income from operations.
For a prospective franchisee, this means that Zoomin Groomin generates revenue not only from franchise fees and royalties but also from the interest earned on financing provided to franchisees. This interest income contributes to Zoomin Groomin's overall profitability.
It is important to note that the terms of these promissory notes, including the interest rate and due dates, are fixed. This arrangement provides Zoomin Groomin with a predictable stream of income from interest, while franchisees are responsible for repaying the principal and interest according to the agreed-upon schedule.