What was the total amount of extraordinary income for Cinch I.T.?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
| Printer Local Special Science and | 2021 | Restated 2020 | |
|---|---|---|---|
| ENTRAORDINARY INCOME | 5 | 32,487 | |
| Employee Retention Credit | |||
| Paycheck Protection Program loan forgiveness | 3 | 78,135 | 52,407 |
| TOTAL EXTRAORDINARY INCOME | 78.135 | 32,487 | |
| NET INCOME (LOSS) | _ | 135.270 | (106.565) |
| MEMBER'S DEFICIT, BEGINNING OF YEAR - | (186,133) | (100.766) | |
| AS PREVIOUSLY REPORTED | |||
| PRIOR PERIOD ADJUSTMENT - | 6 | 21.198 | |
| Correction of an error |
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the company experienced extraordinary income related to the CARES Act. In 2020, the total extraordinary income was $32,487. In 2021, the total extraordinary income increased to $78,135. This income primarily came from the Paycheck Protection Program (PPP) loan forgiveness.
The CARES Act, which established the PPP, allowed companies to apply for forgivable loans to cover payroll costs, benefits, and utilities during the COVID-19 pandemic. Cinch I.T. received forgiveness of debt in the amounts of $17,997 in June 2021 from the first loan and $60,138 in 2021 from the second loan. These amounts were recognized as extraordinary income due to the unprecedented nature of the pandemic.
For a prospective Cinch I.T. franchisee, this information provides insight into how the company managed its finances during the COVID-19 pandemic. While such extraordinary income is unlikely to recur, it demonstrates the company's ability to leverage available resources and relief programs. It's important to note that these figures reflect the financial performance of the company itself and not necessarily the performance of individual franchise locations.