What was the reported net cash flow from operating activities for Chicken Guy?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
| Cash flows from operating activities: | |
|---|---|
| Net Income (Loss) | $526,349 |
| Adjustments to reconcile net income (loss) to | |
| net cash flows from operating activities: | |
| Change in cash resulting from changes in: | |
| Related party receivables | ($311,828) |
| Accrued expenses | $30,500 |
| Royalty receivable | ($44,812) |
| Contract assets | $375 |
| Contract liabilities | $30,751 |
| Accounts Payable | ($20,000) |
| Due to Franchise | ($200,000) |
| Net cash flows from operating activities | $11,335 |
| Net change in cash and restricted cash | $11,335 |
| Cash and restricted cash, beginning of year | $37,756 |
| Cash and restricted cash, end of year | $49,091 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the net cash flow from operating activities for the year 2024 was $11,335. This figure represents the cash generated or used by the company's core business activities, such as the franchising of Chicken Guy restaurants. It's a key indicator of the company's ability to fund its operations and growth through its primary revenue streams. The net income for the same period was $526,349, but several adjustments were made to reconcile this figure to the net cash flow. These adjustments include changes in related party receivables (-$311,828), accrued expenses ($30,500), royalty receivable (-$44,812), contract assets ($375), contract liabilities ($30,751), accounts payable (-$20,000), and due to franchise (-$200,000).
For the year 2023, the net cash provided by (used for) operating activities was ($17,357) and for 2022 it was $43,258. The 2024 beginning cash and restricted cash was $37,756 and the ending cash and restricted cash was $49,091.
Prospective franchisees should note that positive cash flow from operations indicates that Chicken Guy is effectively managing its working capital and generating sufficient cash to cover its immediate obligations. However, a single year's figure should be viewed in the context of the company's overall financial performance and trends over multiple years. Reviewing these cash flow statements helps potential franchisees understand the financial health and stability of Chicken Guy, which is crucial for assessing the risks and opportunities associated with investing in a franchise.