What was the change in accounts payable and accrued expenses for Big Apple Bagels in 2024?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Years Ended November 30, 2024, 2023 and 2022 | ||||
|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||
| Operating Activities | ||||
| Net Income | $ 433,770 | $ 432,927 | $ 429,951 | |
| Adjustments to reconcile net income to cash | ||||
| flows provided by operating activities: | ||||
| Depreciation | - | - | 748 | |
| Provision for doubtful accounts (recoveries) | 22,230 | 18,000 | (3,005) | |
| Loss on sales-type lease termination | 11,659 | - | (5,319) | |
| Deferred income tax (benefit)/expense | 4,150 | 19,448 | 75,966 | |
| Changes in: | ||||
| Trade accounts, notes and lease receivable | (278) | (32,537) | (28,999) | |
| Marketing Fund contributions receivable | (2,399) | (2,184) | 13,275 | |
| Prepaid expenses and other assets | 14,253 | 23,594 | (12,186) | |
| Accounts payable and accrued expenses | 79,167 | 7,312 | 8,680 | |
| Unexpended Marketing Fund | ||||
| franchisee contributions | (37,068) | (89,563) | (329,148) | |
| Deferred franchise fee revenue | (40,673) | 50,168 | 16,850 | |
| Net Cash Provided by Operating Activities | 484,811 | 427,165 | 166,813 | |
| Investing Activities | ||||
| Sale of equipment | 16,700 | - | - | |
| Advances to affiliates (net of repayments) | (172,652) | (276,802) | (324,240) | |
| Issuance of note receivable | (25,610) | - | - | |
| Net Cash Used in Investing Activities | (181,562) | (276,802) | (324,240) | |
| (Decrease)/Increase in Cash | 303,249 | 150,363 | (157,427) | |
| Cash and Restricted Cash, Beginning of Year | 2,034,040 | 1,883,677 | 2,041,104 | |
| Cash and Restricted Cash, End of Year | $ 2,337,289 | $ 2,034,040 | $ 1,883,677 | |
| Supplemental disclosure of cash flow information: | ||||
| Taxes paid (recorded through inter-company account) | $ 165,857 | $ 158,550 | $ 117,841 | |
| Interest paid | $ - | $ - | $ - | |
| Non-cash operating and investing activities | ||||
| Asset held for resale offsetting lease termination loss | $ 4,500 | $ - | $ - | |
| Adopted Accounting Pronouncements | ||||
| In June | 2016, November 30, | the FASB November 30, | issued ASU | 2016-13, |
| 2024 | 2023 | |||
| Accounts Receivable (Franchise Related) | $ 69,285 | $ 55,781 | ||
| Notes Receivable | 51,103 | 30,873 | ||
| Lease Receivable, Net of Unamortized Interest | - | 38,306 | ||
| 120,388 | 124,960 | |||
| Less: Allowance for Credit Losses | ( 51,103) | ( 28,873) | ||
| Total Receivables | 69,285 | 96,087 | ||
| Less: Current Portion | ( 69,285) | ( 92,576) | ||
| Long-Term Receivables | $ - | $ 3,511 | ||
| (Franchise | (Vendor | Notes | Receivable, | |
| Related) | Related) | Receivable | Net | |
| Balance at November 30, 2023 | $ - | $ - | $ 28,873 | $ - |
| Adjustments to Allowance for Adoption | ||||
| of ASU 2016-13 | - | - | - | - |
| Write-offs | - | - | - | - |
| Recoveries | - | - | (5,380) | - |
| Provision for Credit Losses | - | - | 27,610 | - |
| Balance at November 30, 2024 | $ - | $ - | $ 51,103 | $ - |
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the company's accounts payable and accrued expenses increased by $71,855 in 2024. The FDD shows that accounts payable and accrued expenses were $79,167 in 2024 and $7,312 in 2023. This increase could reflect a number of factors, such as increased inventory purchases, delayed payments to suppliers, or changes in accrued liabilities like wages or taxes.
For a prospective Big Apple Bagels franchisee, this information provides insight into the company's short-term financial obligations and how they have changed over time. While an increase in accounts payable isn't inherently negative, it's important to understand the reasons behind the change. A significant increase could indicate that the company is managing its cash flow more tightly or is taking advantage of extended payment terms from its suppliers.
It's worth noting that accounts payable and accrued expenses are common liabilities for most businesses, including franchises. They represent obligations to pay suppliers and other parties for goods or services received but not yet paid for. Monitoring these figures can help franchisees assess the financial health and stability of Big Apple Bagels as a franchisor.
Franchisees may want to inquire about the specific factors that contributed to the increase in accounts payable and accrued expenses. Understanding the underlying reasons can provide a more complete picture of the company's financial management practices and potential implications for franchisees.