What was the 'Increase (Decrease) in Cash' for 7 Brew for the period ending December 25, 2022?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
ber 29, 2024 | $ 17,776,440 |
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| December 29, 2024 | December 31, 2023 | December 25, 2022 | |
|---|---|---|---|
| Operating Activities | $ 18,388,782 | $ 1,560,891 | $ (2,563,076) |
| Net income (loss) | |||
| Adjustments to reconcile net income (loss) to net cash | |||
| provided by operating activities Depreciation and amortization Operating lease asset/liability Loss on disposal of software in development Gift card breakage | 55,238 12,550 693,200 (1,485,646) | 19,643 35,666 - - | 9,407 - - - |
| Changes in Accounts receivable Prepaid expenses and other current assets Accounts payable and accrued expenses Deferred franchise fees | (848,299) (1,600,294) 5,954,321 4,428,639 | (135,935) (176,538) 2,074,593 8,509,758 | (537,588) (43,392) 1,878,039 9,312,180 |
| Net cash provided by operating activities | 25,598,491 | 11,888,078 | 8,055,570 |
| Investing Activities Purchase of property and equipment Advances to Parent Net cash used in investing activities | (941,616) (3,949,623) (4,891,239) | (421,290) (12,999,978) (13,421,268) | (60,581) (13,593,164) (13,653,745) |
| Increase (Decrease) in Cash | 20,707,252 | (1,533,190) | (5,598,175) |
| Cash, Beginning of Period | 2,111,088 | 3,644,278 | 9,242,453 |
| Cash, End of Period | $ 22,818,340 | $ 2,111,088 | $ 3,644,278 |
| Supplemental Non-Cash Activities Right-of-use asset obtained in exchange for new operating lease liability Accounts payable and accrued expenses relating to purchases of f |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 82)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the Increase (Decrease) in Cash for the period ending December 25, 2022, was a decrease of $5,598,175. This indicates that 7 Brew had a net cash outflow during that period. This figure is derived from the audited financial statements included in the FDD. Understanding the factors contributing to this decrease would be important for a prospective franchisee.
The decrease in cash is a snapshot of the company's financial activities during 2022. It reflects the net effect of cash inflows from operating, investing, and financing activities. While a decrease in cash might seem negative, it is essential to consider the context. For instance, 7 Brew might have been investing heavily in property and equipment, as evidenced by the purchase of property and equipment totaling ($60,581) during that same period, or making advances to the Parent company, which totaled ($13,593,164). These are typical activities for a growing franchise system.
For a potential franchisee, this information highlights the importance of reviewing the full financial statements and understanding the company's cash flow dynamics. It would be prudent to investigate the specific reasons behind the cash decrease, such as expansion-related investments or operational challenges. Furthermore, comparing these figures with subsequent years (2023 and 2024) provides a more comprehensive view of 7 Brew's financial trajectory and stability.
Ultimately, a prospective franchisee should consult with a financial advisor to assess the implications of these financial figures and determine whether the franchise opportunity aligns with their investment goals and risk tolerance. Understanding the historical financial performance of 7 Brew is a critical step in making an informed decision about investing in the franchise.