What was the cash and restricted cash at the beginning of the year for 1 800 Packouts in 2022?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
terest expense | | (3,821,499) | | (647,029) | | Earnings from unconsolidated subsidiary | | - | | 77,537 | | Gain on sale of unconsolidated subsidiary | | 1,025,637 | | - | | Other income (expense) | _ | (51,463) | | (112,956) | | Total other expense, net | _ | (2,847,325) | | (682,448) | | Loss before income taxes | | (11,719,346) | | (6,523,717) | | Income tax benefit | _ | 1,280,676 | | 374,421 | | Net loss | $ | (10,438,670) | s | (6,149,296) |
| Balance as of April 9, 2021 (inception) | $ | |
|---|---|---|
| Contributions | 47,557,681 | |
| Net loss | (6,149,296) | |
| Balance as of December 31, 2021 | 41,408,385 | |
| Contributions | 35,555,980 | |
| Distributions | (250,000) | |
| Net loss | _ | (10,438,670) |
| Balance as of December 31, 2022 | Ś | 66,275,695 |
| For the year ded December 31, 2022 | (in | r the period from April 9, 2021 ception) through cember 31, 2021 | ||
|---|---|---|---|---|
| Cash flows from operating activities: | ||||
| Net loss | $ | (10,438,670) | $ | (6,149,296) |
| Adjustments to reconcile net loss to net cash used in | ||||
| operating activities: | ||||
| Amortization of goodwill and intangible assets | 10,568,470 | 2,543,033 | ||
| Depreciation of fixed assets | 29,104 | 5,840 | ||
| Amortization of deferred financing costs | 213,726 | 38,998 | ||
| Amortization of operating lease right-of-use asset | 108,253 | - | ||
| Gain on sale of unconsolidated subsidiary Loss on disposal of fixed assets | (1,025,637) 43,615 | - | ||
| Provision for bad debt | 43,615 25,950 | 32,710 | ||
| Decrease (increase) in: | 23,330 | 32,710 | ||
| Accounts receivable | (777,114) | 34,410 | ||
| Contract assets | (2,540,535) | (169,463) | ||
| Other assets | (535,234) | (216,538) | ||
| Increase (decrease) in: | 2 012 105 | 472.450 | ||
| Accounts payable and accrued expenses Contract liabilities | 2,012,196 3,647,786 | 472,458 768.118 | ||
| Operating lease liabilities | (76,533) | 700,110 | ||
| Deferred taxes | (1,269,181) | (409, 393) | ||
| Net cash used in operating activities | _ | (13,804) | (3,049,123) | |
| • | _ | (13,604) | (3,049,123) | |
| Cash flows from investing activities: | (000 774) | (5.040) | ||
| Purchase of property and equipment | (238,771) | (5,840) | ||
| Contingent consideration paid | ||||
| Proceeds from sale of unconsolidated subsidiary | (1,200,000) 1,623,174 | |||
| Net cash paid for acquisitions | (46,109,861) | (62,103,632) | ||
| Net cash used in investing activities | Ξ | (45,925,458) | (62,109,472) | |
| Cash flows from financing activities: | ||||
| Member contributions | 29,025,980 | 40,065,556 | ||
| Borrowing on long-term debt | 20,100,000 | 28,000,000 | ||
| Payment of debt issuance costs | (307,500) | (932,140) | ||
| Repayment of long-term debt | (378,894) | 2.070.502 | ||
| Borrowing on short-term debt | 3,078,592 | |||
| Repayment of short-term debt | (3,000,000) | |||
| Member distributions | (250,000) | (3,000,000) | ||
| Net cash provided by financing activities | 48,189,586 | 67,212,008 | ||
| Net change |
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, the cash and restricted cash at the beginning of 2022 was $2,053,413. This figure represents the total amount of readily available funds and funds held for specific purposes, such as the national branding funds contributed by franchisees.
For a prospective franchisee, understanding the company's cash position is crucial as it reflects the financial health and stability of 1 800 Packouts. A healthy cash balance indicates that the company has sufficient liquidity to meet its short-term obligations and invest in growth opportunities. It also suggests that 1 800 Packouts is managing its finances effectively and is less likely to face financial distress.
The restricted cash, which is part of the total cash and restricted cash, is specifically earmarked for national branding funds. These funds are contributed by franchisees and are intended to be used for marketing and advertising efforts. This arrangement ensures that there are dedicated resources for promoting the 1 800 Packouts brand at a national level, which can benefit all franchisees by increasing brand awareness and attracting more customers.
It is important for potential franchisees to review the trends in cash and restricted cash over time to assess the company's financial performance and stability. While the FDD provides the figure for the beginning of 2022, reviewing subsequent years' figures would offer a more comprehensive understanding of 1 800 Packouts's financial management and its ability to support its franchisees.