What was the effect of change on the net income (loss) for 7 Brew, as indicated in the financial statements?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
| Ended | December | 31, | 2023 | |
|---|---|---|---|---|
| ------ | ------- | ---------- | ----- | ------ |
| Previously Reported | Effect of Change | As | s Adjusted | |
|---|---|---|---|---|
| Franchise fees | $ 1,329,899 | $ (1,113,854) | $ | 216,045 |
| Net income (loss) | 2,674,745 | (1,113,854) | 1,560,891 | |
| Current portion of deferred franchise fees | 2,042,666 | (1,512,108) | 530,558 | |
| Deferred franc |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 82)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the effect of a certain change on the previously reported net income (loss) was a reduction of $1,113,854. This adjustment resulted in a net income (loss) of $1,560,891 after the change was applied. The original, previously reported net income (loss) was $2,674,745.
This type of adjustment is not uncommon during financial audits and restatements. It reflects a correction to how financials were initially recorded. For a prospective 7 Brew franchisee, this highlights the importance of carefully reviewing the financial statements and understanding any adjustments that have been made.
It would be prudent for a potential franchisee to inquire about the specific reasons for this change and its implications for the company's overall financial health. Understanding the nature of these adjustments can provide a clearer picture of the franchise's financial stability and future prospects.