What was the Total Shareholders' (Deficit) for City Publications as of December 31, 2022?
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 total shareholders' deficit as of December 31, 2022, was ($135,000). This figure represents the cumulative financial position of the shareholders, taking into account common stock, additional paid-in capital, retained earnings, and due from affiliates. A negative value indicates that the company's liabilities and obligations exceed its assets from a shareholder perspective.
Specifically, the components contributing to this deficit include a Common Stock value of $1,000, Additional Paid-In Capital of $17,000, a Due From Affiliates balance of ($1,781,953), and Retained Earnings of $1,628,953. The 'Due From Affiliates' represents money owed to City Publications by related entities, but is classified as a component of shareholders' deficit because the affiliates are under common control through common ownership. Retained earnings reflect the accumulated profits (or losses) of the company over time.
For a prospective franchisee, this shareholders' deficit could signal potential financial instability or challenges within City Publications. It's important to investigate the reasons behind the deficit and understand the company's plan to address it. While not uncommon for younger or rapidly growing franchise systems to have a deficit, it warrants careful consideration and further due diligence to assess the long-term viability and financial health of the franchise. A potential franchisee should seek clarification from City Publications regarding the strategies in place to improve the shareholders' equity position and ensure the company's financial stability.