What was the amount of Advances from (to) affiliates for City Publications during 2023?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
Debt expense | 312 | - | 26,102 | | | Depreciation expense | 3,000 | 3,000 | 3,000 | | | TOTAL OPERATING EXPENSES | 1,140,130 | 1,172,585 | 1,153,845 | | | OPERATING INCOME | 273,141 | 99,917 | (13,378) | | | OTHER (EXPENSE) | | | | | | Interest expense | (9,194) | (414) | (460) | | | NET INCOME | $ 263,947 | $ 99,503 | $ (13,838) | |
CITY PUBLICATIONS FRANCHISE GROUP, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIT) FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
| Common Stock | Additional Paid-In Capital | Due From Affiliates | Retained Earnings | Total Shareholders' (Deficit) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| BALANCE, DECEMBER 31, 2021 | $ 1,000 | $ | 17,000 | $ (1,770,163) | $ 1,715,261 | $ (36,902) | |||||
| Advances from (to) affiliates | (11,790) | (11,790) | |||||||||
| Capital (distributions) | (72,470) | (72,470) | |||||||||
| Net (loss) | (13,838) | (13,838) | |||||||||
| BALANCES, DECEMBER 31, 2022 | 1,000 | 17,000 | (1,781,953) | 1,628,953 | (135,000) | ||||||
| Advances from (to) affiliates | - | - | (67,140) | - | (67,140) | ||||||
| Capital additions | - | - | - | 17,027 |
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the amount of Advances from (to) affiliates in 2023 was ($67,140). This figure is found within the Consolidated Statements of Changes in Shareholders' (Deficit). These advances represent financial transactions between City Publications and its affiliated entities.
Specifically, this amount reflects the financial support City Publications provided to its affiliates during the specified year. It is important to note that these advances are classified as a component of shareholders' (deficit) because the affiliates are under common control through common ownership. This means that the advances are not treated as typical loans with set repayment terms but rather as internal transfers within the related entities.
For a prospective franchisee, understanding these related-party transactions is crucial. It provides insight into the financial relationships and dependencies within the City Publications network. While these advances bear no interest and have no repayment terms, it's essential to assess the overall financial health and stability of these affiliates, as their performance could indirectly impact the franchise system. A potential franchisee should seek clarification from City Publications regarding the nature and purpose of these advances to fully understand their implications.