What was the total amount of Cinnaholic's contract assets as of December 31, 2024?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
| 71,199 | (331,695) | |||
|---|---|---|---|---|
| Members' (Deficit) - Beginning | (2,290,083) | (2,025,527) | ||
| Members' Contributions (Distributions) | 108,591 | 67,139 | ||
| Members' (Deficit) - Ending | $ (1,710,293) | $ (2,290,083) | # CINNAHOLIC FRANCHISING LLC STATEMENTS OF CASH FLOWS |
| YEARS ENDED | DECEMBER 31 | ||
|---|---|---|---|
| 2024 | 2023 | ||
| Operating Activities | |||
| Net (Loss) | $ 471,199 | $ (331,695) | |
| Adjustments to reconcile net (loss) to net cash | 3 471,133 | 3 (331,033) | |
| provided by operating activities: | |||
| Changes in assets and liabilities | |||
| Due from franchisee | 1,500 | _ | |
| Accounts Receivable | - | 94,821 | |
| Prepaid Expenses | 117,143 | (101,926) | |
| Investments (securities) | - | 88,212 | |
| Contract Assets | 87,346 | 3,657 | |
| Accounts payable and accrued expenses | (110,381) | (12,248) | |
| Related party payable | 143,121 | 61,000 | |
| Advertising fund liability | (10,218) | ||
| Contract Liabilities | (806,931) (97,003) (27)2227 | 67,572 (140,825) (2.0,020) | |
| Financing Activities | |||
| SBA loan payments | (148,312) | ||
| Investing Activities |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 61)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the company's contract assets totaled $87,346 as of December 31, 2024. This figure represents the value of Cinnaholic's rights to receive consideration for goods or services that have been transferred to a customer but for which Cinnaholic has not yet been billed. In simpler terms, it reflects work Cinnaholic has performed or services they've provided for which payment is still outstanding.
Contract assets are distinct from accounts receivable, which represent amounts Cinnaholic has already invoiced to customers. The presence of contract assets on Cinnaholic's balance sheet indicates that the company is recognizing revenue over time as it fulfills its obligations under contracts with customers, which is a common practice in franchise agreements where initial fees or ongoing services are provided.
For a prospective Cinnaholic franchisee, understanding the franchisor's contract assets can provide insight into how Cinnaholic recognizes revenue and manages its financial obligations. It's also worth noting that the contract assets increased significantly from $3,657 in 2023 to $87,346 in 2024, which could reflect changes in Cinnaholic's business operations or accounting practices. Reviewing these figures in the context of Cinnaholic's overall financial performance can help potential franchisees assess the financial health and stability of the franchise system.