What was the amount of Carls' accumulated deficit as of January 31, 2023?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
| Jan | uary 31, 2023 | Jan | uary 31, 2022 | |
|---|---|---|---|---|
| ASSETS | ||||
| Current assets: | 281/457 $257 | |||
| Cash and cash equivalents | 107,853 | $ | 130,508 | |
| Cash and cash equivalents - restricted | 16,053 | 16,059 | ||
| Accounts receivable, net | 37,541 | 39,123 | ||
| Inventories | 2,999 | 4,220 | ||
| Prepaid expenses | 6,183 | 21,605 | ||
| Other current assets | 83 | 24 | ||
| Total current assets | - | 170,712 | 211,539 | |
| Property and equipment, net | 371,572 | 362,149 | ||
| Operating lease assets | 448,064 | _ | ||
| Goodwill | 540,083 | 540,083 | ||
| Intangible assets, net | 793,030 | 844,385 | ||
| Other assets, net | 29,806 | 27,413 | ||
| Total assets | $ | 2,353,267 | $ | 1,985,569 |
| LIABILITIES AND EQUITY | ||||
| Current liabilities: | ||||
| Current portion of long-term debt | $ | 13,700 | $ | 11,800 |
| Current portion of finance leases | 1,268 | 1,466 | ||
| Current portion of operating leases | 85,529 | _ | ||
| Accounts payable | 28,159 | 34,312 | ||
| Other |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, as of January 31, 2023, the company had an accumulated deficit of ($540,277). This means that, cumulatively, Carls's losses have exceeded its earnings by $540,277 up to that date.
For a prospective franchisee, an accumulated deficit of this magnitude could raise concerns about the financial stability and overall performance of Carls. It indicates that the company has not been consistently profitable in the past, which could affect its ability to support franchisees or invest in the brand's future growth.
It is important to note that while an accumulated deficit can be a red flag, it does not necessarily mean that the company is currently in financial distress. It is essential for potential franchisees to investigate the reasons behind the deficit and assess the company's current financial performance and future prospects. Further investigation into Carls's recent financial performance, strategic plans for profitability, and any turnaround efforts would be prudent for any potential franchisee.