What was the ending members' deficit for Cinnaholic at the end of 2023?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
A loan payable, net of current | - | 145,046 | | Contract liability, net of current | 2,887,231 | 2,453,611 | | Members' (Deficit) | (2,290,083) | (2,025,527) | | Total Liabilities and Members' (Deficit) | $ 1,740,476 | $ 2,047,238 |
CINNAHOLIC FRANCHISING LLC STATEMENTS OF OPERATIONS AND MEMBERS' (DEFICIT)
| YEARS ENDED DECEMBER 31 | |||
|---|---|---|---|
| 2023 | 2022 | ||
| Revenues | |||
| Royalties | $ 1,326,887 | $ 1,082,982 | |
| Franchise fees | 952,228 | 524,983 | |
| Marketing fund fees | 610,238 | 557,567 | |
| Other | 32,604 2,921,957 | 11,787 2,177,319 | |
| Operating Expenses | 3,226,402 | 2,728,132 | |
| Loss from Operations | (304,445) | (550,813) | |
| Ga |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 61)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the ending members' deficit for the company at the end of 2023 was $(2,290,083). This figure represents the accumulated losses and distributions exceeding contributions by the members of Cinnaholic Franchising, LLC. It is a key indicator of the company's overall financial health and its ability to meet its obligations.
For a prospective franchisee, this deficit figure highlights the importance of thoroughly evaluating Cinnaholic's financial stability and future prospects. While a deficit does not automatically indicate failure, it suggests that the company has faced financial challenges in the past. Understanding the reasons behind the deficit and the strategies Cinnaholic is implementing to address it is crucial for making an informed investment decision.
It is also important to note that the members' deficit can fluctuate from year to year, as demonstrated by the change from $(2,025,527) in 2022 to $(2,290,083) in 2023. This underscores the need for prospective franchisees to carefully review Cinnaholic's financial statements over several years to identify trends and assess the company's long-term financial performance. Consulting with a financial advisor is recommended to fully understand the implications of the members' deficit and its potential impact on the franchisee's investment.