What was the net income 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 ac |
Source: Item 21 — **FINANCIAL STATEMENTS (FDD page 48)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the company experienced a net loss in 2024. The provided financial statements show that Chesters International, LLC had a net income of $(69,699) for the year ended December 31, 2024. In contrast, for the year ended December 31, 2023, Chesters reported a net income of $2,582,783.
This significant decrease in net income from 2023 to 2024 could be a point of concern for potential franchisees. It is important to investigate the reasons behind this downturn, which could be due to various factors such as increased operating expenses, decreased revenues, or specific one-time events like the loss on distributor agreement termination, which amounted to $(2,514,311) in 2024.
Prospective franchisees should carefully review the complete financial statements and notes, and discuss these results with Chesters' management to understand the underlying causes and future financial projections. Understanding the reasons behind the net loss in 2024 is crucial for assessing the financial stability and potential profitability of investing in a Chesters franchise. Furthermore, it would be prudent to compare these figures with industry benchmarks to evaluate Chesters' performance relative to its competitors.