What was the total amount of Chesters' current liabilities in 2023?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
| ASSETS | ||
|---|---|---|
| 2023 | 2022 | |
| CURRENT ASSETS | ||
| Cash | $ 2,515,674 | $ 2,392,340 |
| Accounts receivable, net of allowance for | ||
| doubtful accounts | 5,299,346 | 3,735,366 |
| Due from related parties | 1,117,539 | 684,044 |
| Inventories, net | 1,247,308 | 1,130,712 |
| Prepaid expenses | 49,815 | 101,200 |
| Total current assets | 10,229,682 | 8,043,662 |
| PROPERTY AND EQUIPMENT, NET | 878,650 | 148,788 |
| OPERATING LEASE RIGHT-OF-USE ASSETS, NET | 1,820,812 | 1,304,672 |
| GOODWILL, NET | 1,613,657 | 1,936,388 |
| INTANGIBLE ASSETS, NET | 30,523 | 52,666 |
| TOTAL ASSETS | $ 14,573,324 | $ 11,486,176 |
| LIABILITIES AND MEMBERS' EQUITY | ||
| CURRENT LIABILITIES | ||
| Current maturities of long-term debt | $ 1,628,607 | $ 1,809,133 |
| Accounts payable | 2,904,502 | 719,790 |
| Accrued liabilities | 1,285,555 | 1,365,243 |
| Customer deposits | 609,822 | 533,879 |
| Current portion of operating lea |
Source: Item 21 — **FINANCIAL STATEMENTS (FDD page 48)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the company's total current liabilities for 2023 were $6,746,226. Current liabilities are obligations due within one year, reflecting Chesters's short-term financial obligations. These liabilities include items such as current maturities of long-term debt, accounts payable, accrued liabilities, customer deposits, the current portion of operating lease liability, and unearned franchise fees.
For a prospective franchisee, understanding the franchisor's current liabilities is crucial as it provides insight into the company's short-term financial health and stability. A high level of current liabilities relative to current assets could indicate potential liquidity issues, which might affect Chesters's ability to support its franchisees. Conversely, a manageable level of current liabilities suggests that Chesters is financially stable and capable of meeting its short-term obligations.
Specifically, the current liabilities consist of several components. Current maturities of long-term debt amounted to $1,628,607, accounts payable were $2,904,502, accrued liabilities totaled $1,285,555, customer deposits were $609,822, the current portion of operating lease liability was $181,240, and unearned franchise fees were $136,500. These figures provide a detailed breakdown of the obligations Chesters needs to address within the year.
Franchisees should consider these figures in conjunction with Chesters's assets and overall financial performance to assess the financial risk associated with investing in the franchise. It is advisable to compare these liabilities with those of previous years and with industry benchmarks to determine whether Chesters's financial position is improving, declining, or stable. Consulting with a financial advisor to review these financial statements is also recommended.