What was the income (loss) from operations for Cinch I.T. in the restated 2020 year?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
Non-Disclosure, Non-Solicitation and Non- | M. General Release | | Competition Agreement | | | G. Employee Confidentiality Agreement | N. Receipts |
| 2021 | Restated 2020 | ||||
|---|---|---|---|---|---|
| REVENUE | |||||
| Franchise sales | 5 | 39,625 | S | 16,000 | |
| Advertising | 83,241 | 65,298 | |||
| Annual conference | 26,600 | ||||
| Royalties | 257,946 | 207.393 | |||
| Training | 142,500 | 45,000 | |||
| TOTAL REVENUE | - | 523,312 | 1 | 360,291 | |
| OPERATING EXPENSES | |||||
| Salaries and wages | 156,687 | 255.057 | |||
| Franchise acquisition and development | 38,809 | 27,165 | |||
| Insurance | 12,418 | 28,202 | |||
| Management fee | 75,000 | ||||
| Marketing | 113,640 | 112,112 | |||
| Misoellancous | 10,106 | 6,262 | |||
| Office | 1,086 | 1.730 | |||
| Professional fees and outside services | 20,493 | 18,141 | |||
| Rent | 3,000 | ||||
| Software | 18,327 | 23.915 | |||
| Taxes | |||||
| Other | 456 | - | |||
| Payroll | 12,947 | 24,224 | |||
| Travel and entertainment | 3,208 | 2.292 | |||
| TOTAL OPERATING EXPENSES | 466,177 | 499,100 | |||
| INCOME (LOSS) FROM OPERATIONS | 57,135 | (138,809) | |||
| OTHER EXPENSE - Interest | _ | -6 | 243 | ||
| NET INCOME (LOSS) BEFORE EXTRAORDINARY INCOME | 5 | 57,135 | s | (139,052) |
| Printer Local Special Science and
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the income (loss) from operations for the restated 2020 year was a loss of $138,809. This figure reflects the company's financial performance during that period, specifically the difference between its total revenue and total operating expenses. This loss from operations does not include other expenses such as interest or any extraordinary income.
For a prospective Cinch I.T. franchisee, this information is useful in understanding the franchisor's financial stability and historical performance. A significant loss from operations, as seen in the restated 2020 data, could indicate potential challenges or risks associated with the franchise system. It is important to note that the 2020 year was impacted by COVID-19, which may have contributed to the loss.
However, it is also important to consider the context of this loss. The FDD indicates that certain errors were discovered, leading to a prior period adjustment. This adjustment impacted the previously reported financials, including the net loss and member's deficit. The net effect of the restatement was a decrease in net loss of $32,487. Prospective franchisees should inquire about the reasons for the restatement and the specific nature of the errors that were corrected to fully understand the financial data presented.