What was the balance of members' capital for 360 Painting at the end of 2023?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
| 1,789,095 | 19,498,265 | |
|---|---|---|
| Operating income | 1,803,801 | 2,446,795 |
| Interest income | (2,443) | (5,694) |
| Interest expense | 2,540,123 | 1,504,408 |
| Net income | $ (733,879) $ | 948,081 |
Premium Service Brands, LLC Consolidated Statements of Changes in Members' Equity For the Years Ended December 31, 2023 and 2022
| Members' Capital | Accumulated Deficit | Members' Deficit | |
|---|---|---|---|
| Balances at December 31, 2021 | $ (2,234,887) $ | (1,633,721) $ | (3,868,608) |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, the balance of members' capital at the end of 2023 was a deficit of $3,765,800. The accumulated deficit was $1,419,519, resulting in a total members' deficit of $5,185,319.
This indicates that, as of December 31, 2023, 360 Painting had a significant accumulated deficit. Members' capital represents the investment made by the owners or members of the company, and a negative balance suggests that the company's losses and distributions have exceeded its capital contributions and earnings.
For a prospective franchisee, this information is crucial as it provides insight into the financial health and stability of 360 Painting. A substantial members' deficit might raise concerns about the company's ability to support its franchisees, invest in growth, or manage financial challenges. It is important to note that the financial statements provided are for Premium Service Brands, LLC and Subsidiaries, and not 360 Painting, LLC directly, though Premium Service Brands, LLC guarantees the obligations of 360 Painting, LLC.
Therefore, a potential franchisee should conduct thorough due diligence, including a detailed review of the complete financial statements and discussions with the franchisor, to fully understand the implications of the members' deficit and the overall financial condition of 360 Painting.