What are the total long-term liabilities for Cinch I.T. in 2021?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
| LIABILITIES AND MEMBER | R'S EQUITY (DEFIC | Tr) | ||
|---|---|---|---|---|
| LONG-TERM LIABILITIES | A30 40 A11 | |||
| Long-term deht | 98,500 | Section . | ||
| Long-term portion of deferred revenue | _ | 39,500 | - | 50,500 |
| TOTAL LONG-TERM LIABILITIES | 138,000 | 50,500 |
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's total long-term liabilities in 2021 were $50,500. This figure is derived from the balance sheets detailing the company's financial status for 2022 and 2021. The long-term liabilities are further broken down into long-term debt and the long-term portion of deferred revenue.
The long-term debt is related to a note payable with a 3.75% interest rate, secured by the company's assets, and payable in monthly installments of $508, with the final payment due in February 2052. It's important to note that the monthly payments were deferred for 30 months and were scheduled to begin in September 2024. The principal maturities are set to begin in 2028, after the accrued interest is repaid.
The deferred revenue relates to annual conference fees collected from a related party, Cinch IT, Inc., which purchased a franchise from the company. The franchisee pays royalties and advertising fees, and the conference fees contribute to the deferred revenue balance. Understanding the nature and terms of these liabilities is crucial for prospective franchisees to assess the financial stability and obligations of Cinch I.T.