What was the total member's deficit for Auntie Annes as of December 31, 2023?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Atlanta, Georgia March 11, 2024
Consolidated balance sheets
(In thousands)
| December 31, 2023 | December 25, 2022 | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 22,662 | $ 31,196 |
| Restricted cash and cash equivalents - securitization | 29,582 | 27,456 |
| Accounts receivable, net of allowance for credit losses of | ||
| $1,143 and $1,383 in 2023 and 2022, respectively | 37,049 | 31,935 |
| Inventories | 978 | 1,116 |
| Prepaid expenses and other current assets | 9,263 | 8,720 |
| Advertising funds assets | 7,643 | 6,972 |
| Intercompany receivables from Parent | 3,277 | 3,277 |
| Total current assets | 110,454 | 110,672 |
| Property, equipment, leasehold improvements and land, net | 71,199 | 59,734 |
| Operating lease assets, net | 69,535 | 75,786 |
| Goodwill |
Source: Item 23 — RECEIPTS (FDD pages 106–366)
What This Means (2024 FDD)
According to Auntie Anne's 2024 Franchise Disclosure Document, the total member's deficit as of December 31, 2023, was ($696,181). This figure represents the accumulated losses and distributions exceeding the equity contributions of the member (parent company) up to that date. In the previous year, as of December 25, 2022, the total member's deficit was ($605,206).
A "member's deficit" typically arises when a company's liabilities and obligations exceed its assets, resulting in a negative equity balance. For Auntie Anne's, this indicates that the company's financial performance and distributions to its parent have led to an accumulated deficit. This deficit is a key indicator of the company's overall financial health and its reliance on its parent company for financial support.
Prospective franchisees should carefully consider the implications of this member's deficit. While it doesn't directly impact the day-to-day operations of individual franchise locations, it reflects the financial structure and performance of the overall Auntie Anne's business. It is essential to review the complete financial statements and discuss with the franchisor their plans to address this deficit and ensure the long-term financial stability of the company. Understanding the strategies for managing this deficit can provide valuable insight into the franchisor's commitment to supporting its franchisees and maintaining a healthy franchise system.