What was the amount of advances to the Parent company for 7 Brew as of December 29, 2024?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
audit.
Melville, New York May 28, 2025
Balance Sheets
| December 29, December 31, 2024 2023 | December 25, 2022 | |||||
|---|---|---|---|---|---|---|
| Assets | ||||||
| Current Assets | ||||||
| Cash | $ | 22,818,340 | $ | 2,111,088 | $ | 3,644,278 |
| Accounts receivable | 1,695,688 | 847,389 | 711,454 | |||
| Prepaid expenses and other current assets | 1,820,442 | _ | 220,148 | 43,610 | ||
| Total current assets | 26,334,470 | 3,178,625 | 4,399,342 | |||
| Other Assets | ||||||
| Property and equipment, net | 791,000 | 597,821 | 51,174 | |||
| Right-of-use asset - operating lease | 572,504 | 774,427 | 35,713 | |||
| Advances to Parent | 34,519,197 | 30,569,574 | 17,569,596 | |||
| Total other assets | 35,882,701 | 31,941,822 | 17,656,483 | |||
| Total assets | $ | 62,217,171 | $ | 35,120,447 | $ | 22,055,825 |
| Liabilities and Member's Equity (Deficit) | ||||||
| Current Liabilities | ||||||
| Accounts payable and accrued expenses | $ | 8,624,614 | $ | 4,155,938 | $ | 1,936,345 |
| Current portion of deferred franchise fees | 847,000 | 530,558 | 216,045 | |||
| Current portion of operating lease liability | 223,028 | 189,373 | 30,457 | |||
| Total current liabilities | 9,694,642 | 4,875,869 | 2,182,847 | |||
| Other Liabilities | ||||||
| Deferred franchise fees | 34,348,397 | 30,236,200 | 22,040,955 | |||
| Operating lease liability | 397,692 | 620,720 | 5,256 | |||
| Total other liabilities | 34,746,089 | 30,856,920 | 22,046,211 | |||
| Member's Equity (Deficit) | ||||||
| Member's equity (deficit) | 17,776,440 | _ | (612,342) | (2,173,233) | ||
| Total liabilities and memb |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 82)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, as of December 29, 2024, the company had advanced $34,519,197 to its Parent company. This figure is part of the 'Advances to Parent' line item under 'Other Assets' on the balance sheet. It reflects the financial transactions between 7 Brew and its parent company, Brew Culture, LLC.
This substantial advance to the parent company could have several implications for a prospective franchisee. It is important to understand the nature of these advances. Are they loans, investments, or payments for services? High levels of advances to the parent could indicate the parent company's reliance on 7 Brew's financial resources, or it could simply be a part of normal business operations.
A potential franchisee should investigate the reasons behind these advances. Understanding the terms of repayment, interest rates (if any), and the purpose of the funds is crucial. It would be prudent to discuss this with the franchisor and potentially seek advice from a financial advisor to assess any potential risks or benefits associated with these financial arrangements. This due diligence will help in making an informed decision about investing in a 7 Brew franchise.