What was Chatime's member's deficit for the year ended December 31, 2024?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | |
|---|---|---|
| Development agreements sold | 7 | 2 |
| Multi-unit developments in operation | 2 | _ |
| Terminated outlets | _ | _ |
NOTE 4. LIQUIDITY
The Company has sustained continued net losses and negative cash flows from operations for 2024, and as a result, has a member's deficit of $416,340 for the year ended December 31, 2024. The Company is growing, and as such, is incurring expenditures in the near term to benefit the future as it looks to grow the franchise base and expand into new markets. As such, certain expenses could be reduced or eliminated in order to improve operating cash flows as needed in the future.
As of the date these financial statements were available to be issued, the Company continues to focus on selling franchises. The Company believes that it will meet its funding requirements for one year from the date these financial statements were available to be issued. If necessary, management of the Company has been advised that the Member will continue to provide any financial assistance needed by the Company should its cash flows from operations combined with its available cash balances not be sufficient to meet its working capital needs. Management believes that the Member has the intent and ability to provide the funds needed, if any, to continue to fund the
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the company had a member's deficit of $416,340 for the year ended December 31, 2024. This means that Chatime's liabilities exceeded its assets by this amount at the end of the fiscal year. This deficit is a result of continued net losses and negative cash flows from operations during 2024.
Chatime attributes these losses to expenditures related to growth, including expanding the franchise base and entering new markets. The company suggests that it could reduce or eliminate certain expenses to improve operating cash flows if needed. Despite the current deficit, Chatime believes it will be able to meet its funding requirements for the next year by focusing on selling franchises.
Furthermore, Chatime states that its Member (Chatime Global LLC) has been advised to provide any necessary financial assistance should the company's cash flows from operations and available cash balances be insufficient to meet its working capital needs. Chatime's management believes that the Member has both the intent and the ability to provide the funds needed to continue funding operations for at least one year from the date the financial statements were issued. This indicates a reliance on its parent company to cover operational costs and address the existing deficit.