What was the change in Cicis' trade receivables in 2024?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
s | (2,889,567) | | Net income | 4,210,079 | | | | | Balance, December 31, 2024 | $ 2,423,224 |
Combined Statements of Cash Flows Years Ended December 31, 2024 and 2023
| 2024 | 2023 | |
|---|---|---|
| Cash flows from operating activities: | ||
| Net income | $ 4,210,079 | $ 5,859,705 |
| Adjustments to reconcile net income to net cash provided by | ||
| operating activities: | ||
| Amortization | 57,149 | 38,816 |
| Allowance for credit losses | 30,166 | - |
| Changes in operating assets and liabilities: | ||
| Trade receivables | 4,787 | (139,264) |
| Marketing fund, restricted | 142,369 | (981,151) |
| Related party receivable | (616,187) | 753,587 |
| Prepaid expenses and other current assets | (631,305) | 41,682 |
| Other receivables | 46,123 | (2,952) |
| Accounts payable | (413,045) | 305,641 |
| Accounts payable—marketing fund, restricted | 68,880 | 182,889 |
| Accrued expenses and other current liabilities | (115,228) | (754,380) |
| Deferred franchise fees | 99,444 | 233,291 |
| Related party payable | (596,796) | 427,267 |
| Marketing fund liabilities, restricted | (423,715) | 1,407,044 |
| Deferred initial beverage fund | (387,386) | (789,083) |
| Net cash provided by operating activities | 1,475,335 | 6,583,092 |
| Cash flows from investing activities: | ||
| Website | - | (120,000) |
| Net cash used in investing activities | - | (120,000) |
| Cash flows from financing activities: | ||
| Distributions to members | (2,889,567) | (8,300,000) |
| Net cash used in financing activities | (2,889,567) | (8,300,000) |
| Net decrease in cash, cash equivalents | ||
| and restricted cash | (1,414,232) | (1,836,908) |
| Cash, cash equivalents and restricted cash: | ||
| Beginning |
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 trade receivables changed from a negative value in 2023 to a positive value in 2024. Specifically, in 2023, trade receivables were reported as ($139,264), while in 2024, they were reported as $4,787. This indicates a significant shift in the company's management of its receivables during this period. This change is reflected in the cash flows from operating activities.
This shift could be due to various factors, such as changes in Cicis's credit policies, improvements in collection efforts, or changes in sales volume and payment terms with customers. It's important to note that these figures are part of the broader changes in operating assets and liabilities, which also include items like marketing fund restrictions, related party receivables, prepaid expenses, and other receivables.
For a prospective franchisee, understanding these changes in trade receivables can provide insights into Cicis's financial management practices and its ability to collect payments efficiently. It also highlights the importance of managing accounts receivable effectively to maintain healthy cash flow. Franchisees should inquire about the specific reasons for this change and how Cicis supports franchisees in managing their own receivables.