What was the ending members' equity (deficit) for Aw for the year ending December 31, 2023?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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STATEMENTS OF OPERATIONS AND MEMBERS' EQUITY (DEFICIT) RAYYAN PIZZA FRANCHISE LLC
| YEARS ENDING DECEMBER 31 | |||||
|---|---|---|---|---|---|
| 2024 | 2023 | ||||
| Revenues | |||||
| Franchise fee revenue | $ | 8,000 | $ | 8,250 | |
| Royalties | 190,526 | 203,473 | |||
| Total Revenue | 198,526 | 211,723 | |||
| Operating Expenses | 39,530 | 75,326 | |||
| Net Income | 158,996 | 136,397 | |||
| Members' Equity (Deficit) - Beginning | 617 | 11,732 | |||
| Members' (Distributions) | (156,104) | (1 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the ending members' equity for the year ending December 31, 2023, was $617. This figure represents the net worth of Aw at the end of the accounting period, reflecting the accumulation of net income and any distributions to members.
Members' equity is a critical indicator of a company's financial health. A positive members' equity, as in Aw's case for 2023, generally suggests that the company's assets exceed its liabilities. However, the relatively small amount of $617 indicates that Aw's equity is quite limited. This could imply that the company is highly leveraged or that it has distributed most of its earnings to its members.
Prospective franchisees should carefully consider this figure in the context of Aw's overall financial performance. It's important to review the trend in members' equity over several years to assess whether it is growing, declining, or fluctuating. Additionally, comparing Aw's members' equity to that of other similar franchises can provide valuable insights into its financial stability and long-term viability. Franchisees should also investigate the reasons behind any significant changes in members' equity from year to year, as these changes can signal potential risks or opportunities.