What was the member's deficit at the end of the year for Boulder Designs in 2024?
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's 2025 Franchise Disclosure Document, the member's deficit at the end of 2024 was $(4,122,037). This figure represents the accumulated losses and distributions exceeding the contributions from the member (owner) of the franchise company. It is important to note that a deficit does not necessarily indicate immediate financial instability, but rather the cumulative financial position of the member's equity in the business over time.
For a prospective Boulder Designs franchisee, this information provides insight into the financial health and historical performance of the franchisor. A significant member's deficit could raise concerns about the franchisor's ability to support its franchisees or invest in the growth of the franchise system. However, it is essential to consider this figure in the context of other financial metrics, such as revenue, expenses, and cash flow, to gain a comprehensive understanding of the franchisor's financial condition.
It is also useful to compare the member's deficit over several years to identify any trends or patterns. In this case, the member's deficit increased from $(3,810,894) at the end of 2023 to $(4,122,037) at the end of 2024. This increase suggests that the company's losses and distributions exceeded contributions during 2024, further emphasizing the importance of a thorough financial review before investing in a Boulder Designs franchise. A potential franchisee should seek clarification from Boulder Designs regarding the reasons for the deficit and the strategies in place to improve the company's financial performance.
In addition to reviewing the member's deficit, prospective franchisees should carefully examine the franchisor's audited financial statements, including the balance sheet, income statement, and cash flow statement. These statements provide valuable information about the franchisor's assets, liabilities, revenues, expenses, and cash flows, which can help franchisees assess the financial risks and opportunities associated with investing in a Boulder Designs franchise.