What was the amount of advances from (to) affiliates for City Publications during the year ended December 31, 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, advances from (to) affiliates in 2023 amounted to ($67,140). This figure represents the financial transactions between City Publications and its related entities, specifically the net amount advanced to support affiliate operations during that year. These advances are classified as a component of shareholders' deficit because the affiliates are under common control through common ownership, and they do not bear interest or have specific repayment terms.
For a prospective franchisee, this related-party transaction data provides insight into City Publications' financial dealings with its affiliates. It is important to note that the advances to affiliates can impact the overall financial health of the company. While these advances support affiliate operations, the lack of interest and defined repayment terms means that City Publications carries the risk of these funds not being readily available or repaid.
Furthermore, the FDD reveals that during the years ended December 31, 2024, 2023, and 2022, City Publications provided management and advertising services to its affiliate HHCI, generating revenues of $300,827, $285,828, and $225,539, respectively. Understanding the nature and extent of these related-party transactions is crucial for potential franchisees to assess the financial stability and operational practices of City Publications.