What was the amount of distributions to members for Cicis in 2023?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
) | | Net income | 9,407,023 | | Balance, December 31, 2022 | 3,543,007 | | Distributions | (8,300,000) | | Net income | 5,859,705 | | | | | Balance, December 31, 2023 | $ 1,102,712 |
Combined Statements of Cash Flows Years Ended December 31, 2023 and 2022
| 2023 | 2022 | |
|---|---|---|
| Cash flows from operating activities: | ||
| Net income | $ 5,859,705 | $ 9,407,023 |
| Adjustments to reconcile net income to net cash | ||
| provided by operating activities: | ||
| Amortization | 13,149 | 13,149 |
| Changes in operating assets and liabilities: | ||
| Trade receivables | 186,610 | (73,448) |
| Marketing fund, restricted | (1,307,025) | 1,045,443 |
| Related party receivable | 753,587 | (502,090) |
| Prepaid expenses and other current assets | 41,682 | 532,467 |
| Other receivables | (2,952) | 226,453 |
| Accounts payable | 305,641 | 90,785 |
| Accounts payable—marketing fund, restricted | 182,889 | (636,450) |
| Accrued expenses and other current liabilities | (754,380) | 668,395 |
| Deferred franchise fees | 233,291 | 325,663 |
| Related party payable | 427,267 | (49,523) |
| Marketing fund liabilities, restricted | 1,407,044 | (2,623,924) |
| Other noncurrent liabilities | (789,083) | (775,153) |
| Net cash provided by operating activities | 6,557,425 | 7,648,790 |
| Cash flows from investing activities: | ||
| Website in development | (94,333) | (100,000) |
| Net cash used in investing activities | (94,333) | (100,000) |
| Cash flows from financing activities: | ||
| Distributions to members | (8,300,000) | (7,277,500) |
| Net cash used in financing activities | (8,300,000) | (7,277,500) |
| Net (decrease) increase in cash, cash equivalents | ||
| and restricted cash | (1,836,908) | 271,290 |
| Cash, cash equivalents and restricted cash: | ||
| Beginning of year |
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 58–64)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the distributions to members in 2023 were $8,300,000. This figure reflects the cash flow from financing activities, specifically the amount of money distributed to the members of the company during that year. This is a significant outflow of cash, which is important to consider when evaluating the financial health of Cicis.
For a prospective franchisee, understanding the distributions to members provides insight into how Cicis manages its finances and allocates profits. High distributions could indicate strong profitability, but it's crucial to assess whether these distributions impact the company's ability to reinvest in growth, support franchisees, or maintain adequate cash reserves. A potential franchisee should investigate the consistency of these distributions over several years to understand trends and potential impacts on the franchise system.
It is also important to note that distributions to members are not necessarily indicative of the overall profitability of individual franchise locations. While Cicis may be distributing significant amounts to its members, the financial success of a franchise will depend on factors such as location, operating costs, and local market conditions. Therefore, prospective franchisees should conduct thorough due diligence, including reviewing the financial performance of existing franchise locations and consulting with current franchisees, to gain a comprehensive understanding of the potential risks and rewards of investing in a Cicis franchise.