What was the effect of foreign currency translation (gain) loss for City Wide in 2024?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
| Class A | Class B | Capital | Earnings | Income (Loss) | Total | |
|---|---|---|---|---|---|---|
| Balance January 1, 2022 | $ 2,100 | $ 210,000 | $ 366,366 | $ 15,459,388 | $ (5,506) | $ 1 6,032,348 |
| Net income | - | - | - | 10,941,550 | - | 1 0,941,550 |
| Other comprehensive income | - | - | - | - | 26,999 | 26,999 |
| Distributions | - | - | - | ( 8,431,640) | - | (8,431,640) |
| Balance December 31, 2022 | 2,100 | 210,000 | 366,366 | 17,969,298 | 21,493 | 1 8,569,257 |
| Net income | - | - | - | 14,196,288 | - | 1 4,196,288 |
| Other comprehensive loss | - | - | - | - | (6,653) | (6,653) |
| Distributions | ||||||
| - | - | - | ( 21,712,635) | - | (21,712,635) | |
| Balance December 31, 2023 | ||||||
| 2,100 | 210,000 | 366,366 | 10,452,951 | 14,840 | 1 1,046,257 | |
| Net income | ||||||
| - | - | - | 19,161,078 | - | 1 9,161,078 | |
| Other comprehensive income | ||||||
| - | - | - | - | 39,507 | 39,507 | |
| Distributions | ||||||
| - | - | - | ( 16,582,517) | - | (16,582,517) | |
| Balance December 31, 2024 | $ 2,100 | $ 210,000 2024 | $ 366,366 2023 | $ 13,031,512 2022 | $ 54,347 | $ 1 3,664,325 |
| Operating Activities | ||||||
| Net income | $ 19,161,078 | $ 14,196,288 | $ 10,941,550 | |||
| Items not requiring (providing) cash | ||||||
| Depreciation | 999,912 | 1,063,068 | 1,095,919 | |||
| Bad debt expense | 160,526 | 54,103 | 13,153 | |||
| Noncash operating lease cost | 94,315 | 91,359 | 88,451 | |||
| Loss on abandonment of software subscription | 1,454,554 | - | - | |||
| Effect of foreign currency translation (gain) loss | 39,507 | (6,653) | 26,999 |
Source: Item 23 — RECEIPT (FDD pages 65–271)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the effect of foreign currency translation gain for the company in 2024 was $39,507. This figure represents the impact of changes in exchange rates on City Wide's financial statements, specifically how the value of assets and liabilities denominated in foreign currencies are affected when translated into U.S. dollars.
For a prospective franchisee, this indicates that City Wide has international financial activities that are subject to currency fluctuations. A gain suggests that the exchange rates moved favorably for City Wide during 2024, increasing the value of its foreign holdings when reported in U.S. dollars.
While a gain is generally positive, franchisees should be aware that currency translation can also result in losses if exchange rates move unfavorably. This line item reflects the complexities of City Wide's international operations and the potential impact of global economic factors on its financial performance. Franchisees may want to inquire about City Wide's strategies for managing foreign currency risk and how these gains or losses might affect the overall financial health of the company.