Are the City Publications financial statements consolidated?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
CITY PUBLICATIONS FRANCHISE GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
CITY PUBLICATIONS FRANCHISE GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
CITY PUBLICATIONS FRANCHISE GROUP, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIT) FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
The accompanying notes are an integral part of these financial statements.
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CITY PUBLICATIONS FRANCHISE GROUP, INC. ("Company") was formed on December 31, 2002, in the State of Georgia as a corporation. The Company grants franchises for the operation of a business which provides high quality direct mail advertising to a target market of affluent homeowners.
Reporting Entity
The Company's financial statements include the combined results of the Company and City Publications Services, Inc. ("CPS") a Georgia corporation formed on March 29, 2010. The Companies share common ownership. CPS provides marketing, design, and mailing list services to the Company's franchisees and management services to the Company's affiliates. All intercompany balances have been eliminated.
Affiliates
HHCI, LLC (HHCI") was formed on June 17, 2013, in the State of Georgia as a limited liability company. HHCI grants franchises for the right to operate a business under the name of "AmeriCare" and "AMLI Care," which will provide non-medical home care services.
Dunphy Properties, LLC ("DP") was formed June 2, 2005, in the state of Georgia as a limited liability company. DP is a real estate holding and management company and provides long and short term rental and other real estate services to the Company's franchisees.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the financial statements are consolidated. The FDD includes "CITY PUBLICATIONS FRANCHISE GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS", "CITY PUBLICATIONS FRANCHISE GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS", and "CITY PUBLICATIONS FRANCHISE GROUP, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIT) FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022".
Furthermore, Note 1 to the financial statements clarifies that the statements include the combined results of City Publications Franchise Group, Inc. and City Publications Services, Inc. ("CPS"). Both companies share common ownership, and CPS provides marketing, design, mailing list services to City Publications' franchisees, and management services to the company's affiliates. The note also states that all intercompany balances have been eliminated in the consolidated statements.
This consolidation provides a more comprehensive view of the financial health of City Publications by combining the financial data of the parent company and its subsidiary. This is a standard accounting practice when a parent company controls a subsidiary, as it gives a clearer picture of the overall financial position and performance of the combined entity. A prospective franchisee can gain a better understanding of the financial resources and stability of City Publications by reviewing these consolidated statements.
It is important to note that while the financial statements are consolidated, they do not include the results of HHCI, LLC (which franchises AmeriCare) or Dunphy Properties, LLC, as these are considered affiliates rather than subsidiaries for accounting purposes. Understanding the scope of consolidation is crucial for a franchisee to accurately assess the financial information presented.