What was the total shareholders' deficit for City Publications on 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 represents the accumulated shortfall in the company's equity, which is the difference between its assets and liabilities. A shareholders' deficit can arise from accumulated losses over time.
Specifically, the calculation of the total shareholders' deficit includes several components. It starts with common stock valued at $1,000 and additional paid-in capital of $17,000. These are offset by a significant 'Due from affiliates' amount of ($1,849,093), which represents money owed to City Publications by related entities. Finally, retained earnings contribute $1,745,483 to the calculation. The sum of these values results in the total shareholders' deficit of ($85,610).
For a prospective franchisee, a shareholders' deficit may signal financial challenges within the franchise organization. While not necessarily a cause for alarm, it would be prudent to investigate the reasons behind the deficit and understand the franchisor's plan to address it. This could involve reviewing the company's financial performance over recent years, assessing its revenue streams and expense management, and understanding the nature of the transactions with affiliates that contribute to the 'Due from affiliates' balance. A potential franchisee should seek clarification from City Publications regarding the strategies in place to improve the company's financial position and ensure long-term stability.