What was the total shareholders' deficit for City Publications as of December 31, 2024?
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, 2024, was ($73,998). This figure is derived from the consolidated balance sheets, which detail the assets, liabilities, and shareholders' equity (or deficit) of the company. The calculation includes common stock valued at $1,000, additional paid-in capital of $17,000, retained earnings of $1,902,107, and a deduction for amounts due from affiliates totaling ($1,994,105).
A shareholders' deficit, also known as a negative net worth, occurs when a company's liabilities exceed its assets. For City Publications, this means that their obligations to creditors and others are greater than the value of what they owns. While a deficit can be a concern, it is essential to consider the context. In City Publications' case, the deficit is influenced significantly by the 'Due from affiliates' line item, which represents money owed to City Publications by related companies under common ownership.
Prospective franchisees should view this information as part of a broader due diligence process. It's important to understand the nature of the transactions with affiliates and the likelihood of these amounts being repaid. A consistent deficit may indicate financial strain, but it could also be related to accounting practices or specific business strategies. It is advisable for potential franchisees to discuss these figures with City Publications and seek independent financial advice to fully understand the implications for the franchise's financial health and stability.
Understanding the components of the shareholders' deficit is crucial. The 'Due from affiliates' balance significantly impacts the overall deficit. This balance represents transactions between City Publications and its related entities. While these transactions are internal, they affect the company's financial position. Prospective franchisees should inquire about the nature of these transactions, the repayment terms, and the financial health of the affiliated companies to assess the risk associated with this balance.