What is Chatime's strategy for meeting its funding requirements for the year following the availability of the financial statements?
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 is currently focused on selling franchises to meet its funding requirements for the year following the date the financial statements were issued. However, Chatime has experienced net losses and negative cash flows from operations in 2024, resulting in a member's deficit of $416,340 as of December 31, 2024. The company is incurring expenditures with the expectation of future benefits as it grows its franchise base and expands into new markets.
To improve operating cash flows, Chatime indicates that certain expenses could be reduced or eliminated if needed. Furthermore, if the cash flows from operations, combined with available cash balances, are insufficient to meet working capital needs, the management of Chatime has been assured that Chatime Global LLC, the Member, will provide any necessary financial assistance.
Chatime's management believes that the Member has both the intent and the ability to provide the funds needed to continue funding the company's operations for at least one year from the date the financial statements were available to be issued. This commitment from the Member provides a safety net for Chatime's financial stability as it pursues its growth strategy.