How much cash did Chesters pay for interest during the year 2023?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
,834 |
CHESTER'S INTERNATIONAL, LLC STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
| 2023 | 2022 | |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Net income | $ 2,582,783 | $ 2,693,133 |
| Adjustments to reconcile net income to net cash | ||
| provided by operating activities: | ||
| Loss on disposal of fixed assets | - | 12,167 |
| Amortization and depreciation | 462,783 | 503,875 |
| Amortization of operating lease right-of-use assets | 387,265 | 390,480 |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (1,563,980) | (86,568) |
| Due from related parties | (433,495) | (592,834) |
| Inventories | (116,596) | (155,319) |
| Prepaid expenses | 51,385 | (8,823) |
| Accounts payable | 2,184,712 | (161,039) |
| Accrued liabilities | (79,688) | 182,979 |
| Customer deposits | 75,943 | (310,912) |
| Operating lease liabilities | (364,784) | (390,480) |
| Unearned franchise fees | (88,400) | (30,600) |
| Net cash provided by operating activities: | 3,097,928 | 2,046,059 |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Purchases of equipment | (360,666) | (82,235) |
| Purchases of intangibles | (68,566) | (181,396) |
| Net cash used in investing activities | (429,232) | (263,631) |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Repayment of long-term debt | (725,090) | (569,456) |
| Proceeds from long-term debt | - | 161,250 |
| Distribution to members | (1,820,272) | (831,314) |
| Net cash used in financing activities | (2,545,362) | (1,239,520) |
| INCREASE IN CASH | 123,334 | 542,908 |
| CASH AT BEGINNING OF YEAR | 2,392,340 | 1,849,432 |
| CASH AT END OF YEAR | $ 2,515,674 | $ 2,392,340 |
| SUPPLEMENTARY DISCLOSURE OF CASH | ||
| FLOWS INFORMATION: | ||
| Cash paid during the year for interest | $ 139,101 | $ 162,422 |
| Decrease to operating lease right-of-use assets | ||
| due to contract terminations | $ 846,599 | $ - |
| Additions to operating lease right-of-use assets | ||
| obtained from operating lease liabilities | $ 1,930,004 | $ 1,695,152 |
| Reduction of operating lease right-of-use assets |
Source: Item 21 — **FINANCIAL STATEMENTS (FDD page 48)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the company paid $139,101 in cash for interest during the year 2023. This figure is part of the supplementary disclosure of cash flow information within the statements of cash flows. In 2022, Chesters paid $162,422 in cash for interest.
Interest payments typically relate to debts such as loans used to finance business operations or investments. For a prospective franchisee, understanding the franchisor's interest expenses can provide insight into the financial leverage Chesters employs and its debt management practices. High-interest payments could indicate higher debt levels, which might pose a financial risk to the franchisor.
It's important to note that these figures reflect interest paid by the franchisor, Chesters International, LLC, and not the interest expenses that a franchisee might incur from their own business loans. Franchisees should focus on their own projected financial statements and financing arrangements to understand their potential interest expenses.