As of December 31, 2024, what was the member's deficit position for Boulder Designs?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
of long-term debt | 13,971 | 20,793 | | Accounts payable | 191,886 | 291,188 | | Accrued expenses | 293,743 | 188,330 | | Deferred revenue, current | 909,641 | 843,033 | | Total current liabilities | 1,657,241 | 1,598,344 | | Long-term debt, excluding current portion | 571,730 | 528,240 | | Deferred revenue, net of current portion | 3,111,996 | 2,935,560 | | Due to related parties | 272,385 | 390,774 | | Total liabilities | 5,613,352 | 5,452,918 | | Member's deficit | (4,122,037) | (3,810,894) | | Total liabilities and member's deficit | $1,491,315 | 1,642,024 |
See accompanying notes to financial statements.
Statements of Operations and Member's Deficit Years Ended December 31,
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Revenues: | |||
| Franchise fees and royalties | $ 1,297,293 | 420,131 | 1,427,998 |
| Equipment sales | 622,295 | 763,122 | 486,777 |
| Supplies and other | 410,209 | 406,107 | 249,339 |
| 2,329,797 | 1,589,360 | 2,164,114 | |
| Expenses: | |||
| Cost of equipment and supplies | 527,346 | 549,888 | 404,792 |
| Licensing fees | 262,231 | 264,911 |
Source: Item 23 — RECEIPT (FDD pages 50–217)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the member's deficit at the end of the year December 31, 2024, was $4,122,037. This figure represents the accumulated losses and distributions exceeding contributions from the member since the company's inception. This is a significant figure that any potential franchisee should consider.
A member's deficit indicates that the company's liabilities exceed its assets. For a prospective Boulder Designs franchisee, this could signal financial instability or a heavy reliance on debt financing. It's important to investigate the reasons behind the deficit, such as past losses, high operating expenses, or significant capital investments. Understanding the context of this deficit is crucial for assessing the financial health and sustainability of the franchise system.
It would be prudent for a potential franchisee to discuss this deficit with Boulder Designs. Understanding the franchisor's plan to address this deficit and improve the company's financial position is essential. Furthermore, examining the trend of the member's deficit over the past few years, as presented in the table, can provide insights into whether the situation is improving or worsening. This information, combined with a thorough review of the financial statements and discussions with existing franchisees, will help in making an informed decision about investing in a Boulder Designs franchise.