Are there any notes to the Bhc financial statements?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
| Net loss | $ (1,529,745) |
|---|---|
| Adjustments to reconcile net loss to net cash used by operating activities: | |
| Depreciation | 237,303 |
| Amortization of right-of-use assets | 155,509 |
| (Increase) decrease in current assets: | |
| Accounts receivable | (139,178) |
| Inventories | 46,748 |
| Prepaid expenses | 13,128 |
| Increase (decrease) in current liabilities: | |
| Accounts payable | 262,683 |
| Payroll and payroll tax payable | 52,122 |
| Sales tax payable | 1,629 |
| Deferred revenue | 384,010 |
| Net Cash Used by Operating Activities | (515,791) |
| Investing Activities: | |
| Acquisition of property and equipment | (379,598) |
| Increase in deposits | (58,000) |
| Net Cash Used by Investing Activities | (437,598) |
| Financing Activities: | |
| Receipt of customer deposit | 100,000 |
| Payment of principal portion of lease obligations | (143,197) |
| Capital contribution | 760,000 |
| Net Cash Provided by Financing Activities | 716,803 |
| Net Decrease in Cash | (236,586) |
| Cash, Beginning | 523,405 |
| Cash, Ending | $ 286,819 |
| Supplemental Disclosures of Cash Flow Information | |
| Cash paid during the year for: | |
| Interest | $ 41,602 |
| Income taxes | $ 2,400 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2024
NOTE 1 Nature of Business and Summary of Significant Accounting Policies
This summary of significant accounting policies of BHC USA LLC and Subsidiaries ( BHC USA or the Company , hereinafter) is presented to assist in understanding the Company financial statements and notes are representations of the Company their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.
Organization and Nature of Business
The Company is a wholly owned subsidiary of Dining Brands Group Co., Ltd. ( Dining Brands ), a Korea corporation. BHC USA was originally formed in the State of California on January 6, 2022. The Company s current business line is in licensing, franchising, and operating fast food restaurants under the name of bhc CHICKEN , as well as in retail distribution of food products through its subsidiaries. The Company owns 100% of BHC Farmers Market USA Inc ( BHC Farmers ) and BHC Chapman USA Inc both California corporations. The consolidated financial statements of BHC USA include BHC Farmers and BHC Chapman accordingly.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Consolidation Policy
The Consolidated Financial Statements include the financial statements of BHC USA and its wholly-owned subsidiaries: BHC Farmers and BHC Chapman. All significant intercompany balances and transactions have been eliminated in consolidation.
Cash
All of the cash as of December 31, 2024 was in banks other than immaterial petty cash. There were no encumbrances or restrictions on the cash balance.
Allowance for Doubtful Accounts and Sales Returns
The Company provides allowances for doubtful accounts and sales returns based upon prior experiences Inventory Valuation
Inventories are stated at the lower of cost or market, using the first-in, first out (FIFO) method. Substantially all of the inventories are raw materials.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2024
Fair Value Measurement and Long-Lived Assets
The carrying amounts of accounts receivable, accounts payable and all other current assets and liabilities approximate fair value due to their short-term character and maturity.
The -lived intangible assets include trademark and goodwill. Goodwill represents the excess of cost over fair value of net identified assets acquired in business acquisitions.
Source: Item 21 — Financial Statements (FDD page 52)
What This Means (2025 FDD)
Yes, according to Bhc's 2025 Franchise Disclosure Document, there are notes to the consolidated financial statements. These notes are for the financial statements as of December 31, 2024. The notes include a summary of significant accounting policies of BHC USA LLC and Subsidiaries, which are presented to assist in understanding the company's financial statements. These notes represent the integrity and objectivity of the company and conform to generally accepted accounting principles. They have been consistently applied in the preparation of the financial statements.
The notes cover various aspects such as the nature of the business, which includes licensing, franchising, and operating fast food restaurants under the name bhc CHICKEN, as well as retail distribution of food products through its subsidiaries. The notes also address the use of estimates in preparing financial statements, the consolidation policy, cash handling, allowance for doubtful accounts and sales returns, and inventory valuation methods.
Additional notes to the consolidated financial statements include rental expenses for two retail stores, which amounted to $145,081 in 2024. Advertising costs incurred were $360,537 for the year ended December 31, 2024. The notes also state that there are no known claims and pending legal actions against the company arising out of the ordinary course of business. Furthermore, the company had income tax benefits of $427,406 from its net loss from continuing operations during 2024, but these benefits were fully offset by valuation adjustments, resulting in no tax benefit presented on the financial statements. As of December 31, 2024, the company has investments of $1,400,000 each in its subsidiaries BHC Farmers and BHC Chapman. The company owed $112,139 to Dining Brands, its parent company, as of December 31, 2024.