What was the reported amount of accounts payable 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 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 82)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the company's accounts payable and accrued expenses as of December 29, 2024, totaled $8,624,614. This figure represents the company's short-term liabilities, including obligations to suppliers and other creditors. For comparison, the accounts payable and accrued expenses as of December 31, 2023, were $4,155,938, and as of December 25, 2022, they were $1,936,345. These liabilities are considered current, meaning they are due within one year.
The FDD also notes that a liability for unredeemed gift cards is included within these accounts payable and accrued expenses. 7 Brew manages the gift card program by collecting funds from gift card activations. The company completed an initial breakage assessment as of December 29, 2024, analyzing redemption patterns to determine the portion of gift cards not expected to be redeemed. As a result, 7 Brew recognized breakage income of $1.5 million during the year ended December 29, 2024.
For a prospective franchisee, understanding the accounts payable is crucial as it reflects the company's financial obligations. A significant increase in accounts payable could indicate potential financial strain or changes in payment practices. Reviewing these figures over the three-year period provides insight into the company's financial management and stability. It is also important to note that the gift card program and the associated liabilities are managed by 7 Brew, which could impact the overall financial picture.