What was the change in Cicis' trade receivables in 2023?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 | 5,540,074 | 5,268,784 | |
| End of year | $ 3,703,166 | $ 5,540,074 |
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis' 2025 Franchise Disclosure Document, the trade receivables experienced a change of $186,610 in 2023 compared to $(73,448) in 2022. This indicates a significant increase in the amount of money owed to Cicis by its customers or franchisees for goods or services provided on credit. This shift could reflect changes in sales volume, credit policies, or collection efforts.
For a prospective franchisee, this data point highlights the importance of understanding Cicis' accounts receivable management practices. A large increase in trade receivables might suggest that Cicis is extending more credit to its customers, which could increase sales but also elevate the risk of bad debt. Franchisees should inquire about the typical credit terms offered, the procedures for managing overdue accounts, and the potential impact on their cash flow.
Furthermore, the franchisee should investigate the reasons behind the change in trade receivables. Was it due to a specific promotion, a change in payment terms, or other factors? Understanding the underlying drivers will help the franchisee assess the sustainability of this trend and its potential implications for their own business operations. Prudent financial planning and adherence to Cicis' credit management policies are essential for maintaining a healthy cash flow and minimizing the risk of losses from uncollectible accounts.