As of December 31, 2024, what was the accumulated member's deficit for Big Blue Swim School?
Big_Blue_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
old to a related party through common ownership
NOTE 4. MEMBER'S DEFICIT
The Company has historically sustained losses primarily due to the timing of revenue recognition of franchise fees and, as a result, has an accumulated member's deficit of $3,021,265 as of December 31, 2024. During the year ended December 31, 2024, the Company had cash used in operations of $2,445,570. Since inception, the Company's operations have been funded through a combination of capital contributions. Management has represented that the Company is growing and, as such, is incurring expenditures in the near term to benefit the future as developers open franchised units and as the Company looks to grow the franchisee base and expand into new markets. In addition, management has represented certain expenses could be reduced or eliminated in order to improve operating cash flows, as needed, in the future.
As of December 31, 2024, the Company had $579,182 of unrestricted cash. The Company has positive working capital of $726,835, of which $124,919 of current liabilities are related to de
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 75)
What This Means (2025 FDD)
According to Big Blue Swim School's 2025 Franchise Disclosure Document, as of December 31, 2024, the company had an accumulated member's deficit of $3,021,265. This deficit is primarily attributed to the timing of revenue recognition of franchise fees. During the year ending December 31, 2024, Big Blue Swim School's cash used in operations amounted to $2,445,570.
Despite the accumulated deficit, Big Blue Swim School had $579,182 of unrestricted cash and a positive working capital of $726,835 as of December 31, 2024. A portion of the current liabilities, specifically $124,919, is related to deferred revenue, which the company expects to recognize as revenue in the following year. The company's operations have been funded through capital contributions since its inception.
Big Blue Swim School's management believes that the company is currently incurring expenditures to benefit future growth as developers open franchised units and as the company expands its franchisee base into new markets. Management also indicated that certain expenses could be reduced or eliminated to improve operating cash flows if needed. Additionally, the Parent company may provide financial assistance to fund the operations of the company for at least one year.