What was the total value of 1 800 Packouts' current liabilities in 2024?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
| (1) | 2024 | 2023 | |
|---|---|---|---|
| Liabilities and Members' Equity | |||
| Current liabilities: | |||
| Accounts payable | $ | 1,515,669 | $ 713,523 |
| Accrued expenses | 2,383,578 | 2,656,030 | |
| Current | 3,227,336 | 2,517,756 | |
| portion | |||
| of | |||
| contract | |||
| liabilities | |||
| Current portion of operating lease liabilities | 360,394 | 256,163 | |
| Revolving credit facility | 1,100,000 | - | |
| Current portion of long-term debt, net of debt issuance costs | 206,519 | 851,000 | |
| Total current liabilities | 8,793,496 | 6,994,472 |
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts' 2025 Franchise Disclosure Document, the company's total current liabilities amounted to $8,793,496 as of December 31, 2024. This figure represents the sum of several short-term financial obligations, including accounts payable, accrued expenses, the current portion of contract liabilities, the current portion of operating lease liabilities, revolving credit facility, and the current portion of long-term debt, net of debt issuance costs.
For a prospective franchisee, understanding the franchisor's current liabilities is crucial as it provides insight into the company's short-term financial health and obligations. A high level of current liabilities relative to current assets could indicate potential liquidity issues, which might affect the franchisor's ability to support its franchisees or invest in the brand's growth. Conversely, a manageable level of current liabilities suggests financial stability and the capacity to meet short-term obligations.
In comparison, the total current liabilities for 1 800 Packouts in 2023 were $6,994,472. The increase of approximately $1.8 million in current liabilities from 2023 to 2024 could be due to various factors such as increased operational activities, strategic investments, or changes in payment terms with suppliers. A potential franchisee should investigate the reasons behind this increase to assess whether it reflects healthy growth or potential financial strain.
It is important for potential franchisees to review the franchisor's balance sheets and related financial statements in detail, ideally with the assistance of a financial advisor. This review should include an analysis of the components of current liabilities, trends over time, and comparison to industry benchmarks to gain a comprehensive understanding of the franchisor's financial position and its potential impact on the franchise system.