What was the total shareholders' deficit for City Publications as of December 31, 2023?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
ntial doubt about CITY PUBLICATIONS FRANCHISE GROUP, INC.'s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control—related matters that we identified during the audit.
Ft. Collins, Colorado April 20, 2025
CITY PUBLICATIONS FRANCHISE GROUP, INC. CONSOLIDATED BALANCE SHEETS
| AS OF DECEMBER 31, | |||
|---|---|---|---|
| 2024 | 2023 | ||
| ASSETS: | |||
| CURRENT ASSETS | |||
| Cash and equivalents | $ 469,911 | $ 34,370 | |
| Accounts receivable | 6,166 | 10,184 | |
| TOTAL CURRENT ASSETS | 476,077 | 44,554 | |
| NON-CURRENT ASSETS | |||
| Property and equipment | 2,179 | 3,000 | |
| Other assets | 8,362 | 8,362 | |
| TOTAL ASSETS | $ 486,618 | $ 55,916 | |
| LIABILITIES AND SHAREHOLDERS' (DEFICIT): | |||
| CURRENT LIABILITIES | |||
| Accounts payable | $ 478,790 | $ 84,847 | |
| Non-refundable deferred franchise fees, current | 29,393 | 22,373 | |
| TOTAL CURRENT LIABILITIES | 508,183 | 107,220 | |
| NON-CURRENT LIABILITIES | |||
| Non-refundable deferred franchise fees | 52,433 | 34 |
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, 2023, was ($85,610). This figure is derived from the consolidated statements of changes in shareholders' deficit. The calculation includes common stock valued at $1,000, additional paid-in capital of $17,000, retained earnings of $1,745,483, and a deduction for due from affiliates amounting to ($1,849,093).
A shareholders' deficit, also known as a negative net worth, occurs when a company's liabilities exceed its assets. For a prospective City Publications franchisee, this indicates that the company has more obligations than resources. While not uncommon for early-stage or rapidly growing companies, it is a financial metric that potential franchisees should carefully consider.
It's important to note that this deficit does not necessarily mean City Publications is unable to meet its current obligations, but it does suggest that the company has relied on debt or other liabilities to finance its operations. Franchisees should investigate the reasons behind the deficit, such as historical losses, significant capital expenditures, or related-party transactions, to fully understand the financial health and stability of City Publications.
Franchisees should also compare this figure with industry benchmarks and trends to assess whether the deficit is within an acceptable range for similar franchise systems. Consulting with a financial advisor is recommended to evaluate the potential risks and rewards associated with investing in a franchise with a shareholders' deficit.