What were 360 Painting's total liabilities in 2024?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | |
|---|---|---|
| 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 portion | 1,416,676 | 1,568,558 |
| Deferred revenue, noncurrent | 13,875,809 | 12,809,637 |
| Total liabilities | 42,330,330 | 40,685,068 |
| Members' deficit | (5,873,114) | (5,185,319) |
| Total liabilities and members' deficit | $ 36,457,216 $ | 35,499,749 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, the company's total liabilities in 2024 were $42,330,330. This figure represents the sum of all current and non-current liabilities, including accounts payable, accrued liabilities, deferred revenue, lease liabilities, and long-term debt. In comparison, 360 Painting's total liabilities in 2023 were $40,685,068.
For a prospective franchisee, understanding the franchisor's liabilities is crucial as it provides insight into the company's financial stability and potential risks. A high level of liabilities could indicate financial strain, which might affect the franchisor's ability to support its franchisees. It is important to note that liabilities do not inherently mean a company is unstable, but it is a factor to consider when evaluating the overall financial health of the franchise system.
It is common for franchise companies to carry significant liabilities, especially if they have substantial debt or deferred revenue obligations. Deferred revenue, in particular, can be a large component of liabilities for franchise systems due to the upfront franchise fees collected that are recognized over the term of the franchise agreement. In 360 Painting's case, the increase in total liabilities from 2023 to 2024 is primarily due to an increase in long-term debt and deferred revenue, noncurrent.
Prospective franchisees should analyze the trend of liabilities over several years, if available, and compare it to the company's assets and revenue. This analysis can help assess whether the company is managing its debt effectively and whether the revenue is sufficient to cover its obligations. Consulting with a financial advisor is recommended to fully understand the implications of 360 Painting's liabilities on the franchise opportunity.