What is the total value of Cinnaholic's prepaid expenses?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
THESE FINANCIAL STATEMENTS ARE PREPARED WITHOUT AN AUDIT. PROSPECTIVE FRANCHISEES OR SELLERS OF FRANCHISES SHOULD BE ADVISED THAT NO CERTIFIED PUBLIC ACCOUNTANT HAD AUDITED THESE FIGURES OR EXPRESSED HIS/HER OPINION WITH REGARD TO THE CONTENT OR FORM.
Balance Sheet
As of April 30, 2025
| TOTAL | |
|---|---|
| ASSETS | |
| Current Assets | |
| Bank Accounts | |
| A/P Gift Card Acct x5633 | 8,546.48 |
| Clearing Account | 0.00 |
| NMF Checking Acct x5476 | 13,381.96 |
| Primary Business Ckg x1652 | 72,751.71 |
| Schwab Money Market x1771 (Lakeshore Advisors) | 171,722.11 |
| Total Bank Accounts | $266,402.26 |
| Accounts Receivable | |
| Accounts Receivable | -10,000.00 |
| Total Accounts Receivable | $ -10,000.00 |
| Other Current Assets | |
| Employee Cash Advances | 0.00 |
| ERC Receivables | 0.00 |
| Franchise Fees Receivable | 261,000.00 |
| Loan to Franchisee | 1,500.00 |
| Prepaid Commissions | 712,957.00 |
| Prepaid Commissions ST | 262,929.00 |
| Prepaid Expenses | 0.00 |
| Alpha Matter POS Upgrad |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 61)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the total prepaid expenses are detailed in the financial statements. As of the statement provided, the total prepaid expenses amount to $1,017,282.93. This figure represents payments Cinnaholic has made for goods or services that have not yet been fully received or utilized as of the balance sheet date. These prepaid expenses are considered assets on the balance sheet because they represent future economic benefits for Cinnaholic.
Specifically, the detailed breakdown of prepaid expenses includes items such as Alpha Matter POS Upgrade ($531,515.48), Coral Springs ($132,699.2), and Dunwoody ($353,068.24). These line items suggest that Cinnaholic has made advance payments related to point-of-sale system upgrades and expenses related to specific locations (Coral Springs and Dunwoody). The fact that these are broken out separately indicates they are significant components of the total prepaid expenses.
For a prospective franchisee, understanding the nature and magnitude of these prepaid expenses can provide insights into Cinnaholic's operational investments and financial management practices. It's important to note that prepaid expenses are eventually recognized as expenses on the income statement as the benefits are realized over time. Therefore, while they represent an asset on the balance sheet, they will impact future profitability as they are amortized or expensed. A potential franchisee might want to inquire about the specific terms and amortization schedules related to these prepaid expenses to better understand their impact on Cinnaholic's financial performance.