What accounting principles are the consolidated financial statements of XPOF Assetco, LLC, which includes Bft, prepared in accordance with?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
ed Financial Statements (amounts in thousands)
Note 1 – Organization and Description of Business
XPOF Assetco, LLC (the "Company"), a Delaware limited liability company (LLC), was formed on March 6, 2023. The single member of the Company is Xponential Fitness LLC, a Delaware limited liability company (the "Member"). The Company is the direct parent and sole member of Club Pilates Franchise SPV, LLC; CycleBar Franchising SPV, LLC; Stretch Lab Franchise SPV, LLC; Stride Franchise SPV, LLC; Row House Franchise SPV, LLC; Yoga Six Franchise SPV, LLC; AKT Franchise SPV, LLC; PB Franchising SPV, LLC; Rumble Franchise SPV, LLC and BFT Franchise SPV, LLC, (together "Subsidiaries") each a Delaware limited liability corporation. The Company was formed in connection with a contemplated reorganization of Xponential Fitness LLC's structure. The Company, through its brands, licenses its proprietary systems to franchisees who in turn operate studios to promote training and instruction programs to their club members. There were no operations of the Company prior to March 6, 2023.
The Member contributed $8,000 in cash, $8,910 in property and equipment and $90,812 in intangible assets as of March 15, 2023. The majority of the intangible assets contributed consist of trademarks related to Club Pilates, CycleBar and Pure Barre brands. On December 31, 2023, the Member contributed deferred revenue and deferred costs related to franchise agreement contracts with customers of $96,875 and $40,765, respectively. As of January 1, 2024, the Member designated the Company as the administrator of the Member's marketing funds generated prior to December 31, 2023, and transferred all rights to the remaining unspent restricted cash held by the Member for such marketing funds. In addition, on January 1, 2024, the Member transferred the obligation to provide training to the Company for deferred teacher training revenues generated prior to December 31, 2023. This resulted in the contribution of deferred revenue related to teacher training of $3,653 and $8,583 representing the amount of marketing fund restricted cash held by the Member as of January 1, 2024. As the Company and the Member are under common control, all of the assets and liabilities were contributed at their respective carrying value as of the contribution date. All assets held by the Com
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the consolidated financial statements of XPOF Assetco, LLC are prepared in accordance with accounting principles generally accepted in the United States ("US GAAP"). This means that XPOF Assetco, LLC, which includes Bft, adheres to a standardized set of accounting rules, standards, and procedures when creating its financial statements. These principles ensure that the financial information is presented fairly and consistently.
For a prospective Bft franchisee, this is important because it provides a level of assurance that the financial data presented by the parent company, XPOF Assetco, LLC, is reliable and comparable to other companies that follow US GAAP. This allows franchisees to make informed decisions based on a consistent standard of financial reporting. Understanding that the financial statements are prepared using US GAAP helps in assessing the financial health and stability of the overall organization.
However, the FDD also notes that the Company has numerous transactions with its Member and affiliates and relies on resources from the Member and other related parties. The FDD states that the consolidated financial statements may not necessarily be indicative of the conditions that would have existed or the results of operations that would have occurred if the Company had operated without such affiliations. This is an important consideration for potential franchisees as it suggests that the financial performance of XPOF Assetco, LLC is heavily influenced by its relationship with its parent company, Xponential Fitness LLC, and its affiliates. Therefore, the franchisee should consider this relationship when evaluating the financial statements.
It is also important to note that all assets held by the Company collateralize the existing debt of the Member. This means that the assets of XPOF Assetco, LLC, including those related to Bft, are used as security for the debts of its parent company, Xponential Fitness LLC. This could potentially impact the financial stability of Bft if the parent company faces financial difficulties. Prospective franchisees should carefully consider these factors and seek professional financial advice to fully understand the implications of these accounting practices and inter-company relationships.