What was the cash at the end of the year for Chesters in 2024?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
LOWS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
| CASH FLOWS FROM OPERATING ACTIVITIES | _ | | _ | |--------------------------------------------------------------------------------------------|-------------------------|----|-----------------------| | Net income | $ (69,699) | $ | 2,582,783 | | Adjustments to reconcile net income to net cash | | | | | provided by operating activities: | | | | | Loss on disposal of fixed assets | 9,969 | | - | | Amortization and depreciation | 522,927 | | 462,783 | | Amortization of operating lease right-of-use assets | 189,709 | | 387,265 | | Changes in operating assets and liabilities: | | | (4 = 00 000) | | Accounts receivable | 3,642,762 | | (1,563,980) | | Other receivables | (421,459) | | (400,405) | | Due from related parties | (237,110) | | (433,495) | | Inventories | 1,247,308 | | (116,596) | | Prepaid expenses and other current assets | (89,469) (1,834,402) | | (17,181) | | Accounts payable Accrued liabilities | 784,862 | | 2,184,712 (79,688) | | Customer deposits | (248,670) | | 75,943 | | Operating lease liabilities | (181,240) | | (364,784) | | Unearned franchise fees | 54,450 | | (88,400) | | Other long-term liabilities | 174,238 | | (00,400) | | Net cash provided by operating activities: | 3,544,176 | | 3,029,362 | | CASH FLOWS FROM INVESTING ACTIVITIES | | | | | Purchases of equipment | (401,074) | | (360,666) | | Net cash used in investing activities | (401,074) | | (360,666) | | CASH FLOWS FROM FINANCING ACTIVITIES | | | | | Repayment of long-term debt | (1,186,667) | | (725,090) | | Proceeds from long-term debt | 426,111 | | - | | Distribution to members | (2,743,252) | | (1,820,272) | | Net cash used in financing activities | (3,503,808) | | (2,545,362) | | (DECREASE) INCREASE IN CASH | (360,706) | | 123,334 | | CASH AT BEGINNING OF YEAR | 2,515,674 | | 2,392,340 | | CASH AT END OF YEAR | $ 2,154,968 | $ | 2,515,674 | | SUPPLEMENTARY DISCLOSURE OF CASH | | | | | FLOWS INFORMATION: | | | | | Cash paid during the year for interest | $ 181,560 | $ | 139,101 | | Decrease to operating lease right-of-use assets | | _ | | | due to contract terminations | $ 391,533 | $ | 846,599 | | Additions to operating lease right-of-use assets obtained from operating lease liabilities | $ - | $ | 1,930,004 | | Reduction of operating lease right-of-use assets for tenant improvements | $ - | $ | 180,000 | | Noncash activity: | | | | | Assets acquired by assuming liabilities | $ - | $ | 238,539 | See notes to the financial statements.
**1.
Source: Item 21 — **FINANCIAL STATEMENTS (FDD page 48)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the cash at the end of the year 2024 was $2,154,968. This figure represents the total cash on hand that Chesters had at the close of its fiscal year, which is an important indicator of the company's financial health and liquidity.
For a prospective franchisee, understanding the franchisor's cash position is crucial. It provides insight into Chesters's ability to support its franchisees, invest in growth, and manage financial obligations. A strong cash position generally suggests that the franchisor is stable and capable of providing the necessary resources and support to its franchise network.
In comparison, the cash at the end of the year 2023 was $2,515,674. The decrease in cash from 2023 to 2024 could be due to various factors, such as increased investments, changes in operational expenses, or distributions to members. While a decrease doesn't necessarily indicate a problem, it's a point a potential franchisee might want to explore further during their due diligence.
It would be prudent for a prospective Chesters franchisee to investigate the reasons behind the change in cash position, review the complete financial statements, and seek professional financial advice to fully understand the implications for their investment.