What was the amount due from affiliates for City Publications on December 31, 2021?
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 balance sheet includes a category for 'Due From Affiliates.' The table outlining changes in shareholders' deficit shows activity related to affiliates. Specifically, as of December 31, 2021, the 'Due From Affiliates' balance is not explicitly listed as a starting balance. However, the table does show 'Advances from (to) affiliates' as $(11,790) during 2022.
This indicates that there were transactions with affiliates that impacted the overall shareholders' equity. The ending balance for 'Retained Earnings' on December 31, 2021 was $1,715,261, and the 'Total Shareholders' (Deficit)' was $(36,902). The table provides a reconciliation of these balances, showing how advances from or to affiliates, capital distributions, and net losses contributed to the changes in equity.
For a prospective City Publications franchisee, understanding these related-party transactions is crucial. It's important to investigate the nature of these transactions, their potential impact on the franchisor's financial stability, and whether they could affect the support and services provided to franchisees. Further due diligence would involve asking City Publications for a detailed breakdown of the 'Due From Affiliates' balance as of December 31, 2021, to fully understand the financial relationships between City Publications and its affiliates.