What were Cinch I.T.'s total long-term liabilities in 2022?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
| CINCH FRANCHISE LLX BALANCE SHEETS | ||||
|---|---|---|---|---|
| DECEMBER 31, 2023 AND 2 | 022 | |||
| ASSETS | ||||
| CHIRDCHET ADDITIO | 2023 | 2022 | ||
| CURRENT ASSETS Cash | S | 220,489 | S | 189,038 |
| Receivables - trade | 3 | 65,722 | 3 | 54,720 |
| Prepaid expenses | 03,142 | 14,494 | ||
| TOTAL CURRENT ASSETS | s | 286,211 | 8 | 258,252 |
| LIABILITIES AND MEMBER'S (DEFI | CTT/EQU | ITY | ||
| CURRENT LIABILITIES | ||||
| Payables - trade | S | 20,690 | 5 | 5,155 |
| Accrued liabilities | 22,314 | 16,534 | ||
| Current portion of deferred revenue | 42,375 | 55,500 | ||
| TOTAL CURRENT LIABILITIES | = | 85,379 | 77.189 | |
| LONG-TERM LIABILITIES | ||||
| Long-term debt | 98.500 | 98,500 | ||
| Long-term portion of deferred revenue | 19,625 | 39,500 | ||
| Due to related parties | 112,550 | 42,550 | ||
| TOTAL LONG-TERM LIABILITIES | _ | 230,675 | - | 180,550 |
| TOTAL LIABILITIES | 316,054 | 257.739 | ||
| MEMBER'S (DEFICIT) EQUITY | (29,843) | _ | 513 | |
| TOTAL LIABILITIES AND MEMBER'S (DEFICIT) EQUITY | s_ | 286,211 | 5_ | 258,252 |
| See accompanying notes and independent | (Ekuz) |
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 2022 were $180,550. These liabilities consisted of long-term debt of $98,500, a long-term portion of deferred revenue amounting to $39,500, and $42,550 due to related parties.
It's important to note the composition of these liabilities. The long-term debt is related to a note payable with a 3.75% interest rate, secured by Cinch I.T.'s assets, with monthly installments of $508. The payments were deferred and are set to begin in September 2024. The 'due to related parties' represents advances from entities with common ownership, which are unsecured and do not bear interest.
Prospective franchisees should understand the nature of these liabilities, particularly the debt and related-party transactions, as they could indicate the financial structure and obligations of Cinch I.T. itself. Understanding the relationships and repayment terms is crucial for assessing the financial stability of the franchisor.
Reviewing the balance sheets and related notes in Item 23 of the FDD provides a more complete picture of Cinch I.T.'s financial health. It is advisable for potential franchisees to seek professional financial advice to fully understand the implications of these liabilities.