What was 360 Painting's members' deficit in 2023?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Charlottesville, Virginia
April 22, 2025
| 2024 | 2023 | |
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | $ 943,020 $ | 722,074 |
| Accounts receivable, net | 3,218,426 | 2,838,106 |
| Prepaid expenses and other current assets | 3,666,212 | 2,486,419 |
| Total current assets | 7,827,658 | 6,046,599 |
| Property and equipment, net | 762,462 | 728,024 |
| Right-of-use lease asset, net | 1,476,728 | 1,633,661 |
| Intangible assets, net | 11,433,105 | 12,925,497 |
| Goodwill | 7,068,689 | 7,068,689 |
| Other assets | 7,888,574 | 7,097,279 |
| Total assets | $ 36,457,216 $ | 35,499,749 |
| Liabilities and Members' Deficit | ||
| Current liabilities | ||
| Accounts payable | $ 434,745 $ | 435,883 |
| Accrued and other liabilities | 3,365,005 | 3,368,024 |
| Deferred revenue, current | 2,041,424 | 1,860,040 |
| Lease liability, current portion | 150,635 | 124,701 |
| Current maturities of long-term debt | 609,375 | 599,500 |
| Total current liabilities | 6,601,184 | 6,388,148 |
| Long-term debt, net | 20,436,661 | 19,918,725 |
| Lease liability, noncurrent porti |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, the members' deficit for 2023 was ($5,185,319). This figure represents the accumulated losses and distributions exceeding the members' capital contributions as of December 31, 2023. It's important to note that this deficit does not necessarily indicate immediate financial instability but rather the cumulative financial position of the members' equity in the company.
For a prospective franchisee, this information is crucial for assessing the financial health and stability of 360 Painting. A significant members' deficit could raise concerns about the company's ability to support its franchisees or invest in future growth. However, it's also important to consider the context of this deficit, such as the company's recent performance, growth trajectory, and overall financial strategy.
To gain a comprehensive understanding, a potential franchisee should analyze the trend of the members' deficit over several years, as well as the factors contributing to it. Comparing this deficit to industry benchmarks and the financial performance of other franchise systems can also provide valuable insights. Additionally, it would be prudent to discuss this deficit with the franchisor to understand their plans for addressing it and ensuring the long-term financial health of 360 Painting.
It is also important to note that the financial statements provided in the FDD are those of Premium Service Brands, LLC and Subsidiaries, the affiliate of 360 Painting, and not separate financial statements of 360 Painting itself. However, Premium Service Brands, LLC absolutely and unconditionally guarantees to assume the duties and obligations to 360 Painting's franchisees under their franchise agreements.