What was the net loss for Chatime, as reported in the financial statement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISE LLC (A Limited Liability Company) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
| Cash flows from operating activities: Net loss Adjustments to reconcile net loss to net cash provided by (used in) | $ | (561,065) | $ (55,275) |
|---|---|---|---|
| operating activities: Depreciation and amortization Changes in operating assets and liabilities: | 263 | - | |
| Accounts and franchise fees receivable Prepaid commissions Prepaid expenses Accounts payable and accrued expenses Due to affiliat |
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the company experienced a net loss of $561,065 in 2024 and $55,275 in 2023. This information is derived from the statement of cash flows, which reconciles the net loss to the net cash used in operating activities.
For a prospective Chatime franchisee, these figures highlight the importance of carefully reviewing the financial statements and understanding the factors contributing to these losses. While net losses don't automatically signal a failing business, they do warrant further investigation. It would be prudent to inquire about the reasons for the significant difference in net loss between 2023 and 2024.
The FDD also notes that Chatime has sustained continued net losses and negative cash flows from operations for 2024, resulting in a member's deficit of $416,340 as of December 31, 2024. However, the document states that Chatime is growing and incurring expenditures to benefit its future growth, including expanding its franchise base and entering new markets. The Member has been advised to provide financial assistance should the cash flows from operations combined with available cash balances not be sufficient to meet its working capital needs. Prospective franchisees should assess the franchisor's financial stability and long-term viability, considering these factors and seeking clarification on Chatime's plans to improve profitability and manage its cash flow effectively.