What was the increase (decrease) in cash and cash equivalents for City Wide in 2023?
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 | |||
| Deferred compensation | 455,292 | 614,155 | - | |||
| Changes in | ||||||
| Accounts receivable | (838,659) | (645,018) | (691,842) | |||
| Deferred franchise costs and prepaid expenses | (319,698) | 46,486 | (241,676) | |||
| Inventory | 58,725 | (75) | (8,355) | |||
| Software subscription | (631,500) | (891,054) | - | |||
| Accounts payable | 3,969,091 | 2,603,540 | 3,211,061 | |||
| Accrued expenses | 920,639 | 113,353 | 363,757 | |||
| Operating lease liabilities | (182,963) | (180,007) | (177,099) | |||
| Deferred franchise revenue and other deferred income | 503,293 | 555,702 | 1,223,390 | |||
| Deferred compensation | (340,500) | (144,863) | 119,200 | |||
| Refundable advance | (1,618,485) | 2,041,208 | - | |||
| Net cash provided by operating activities | 23,885,127 | 19,511,592 | 15,964,508 | |||
| Investing Activities | ||||||
| Purchase of property and equipment | (311,516) | - | - | |||
| Increase in cash value of life insurance | (599,375) | (349,479) | (108,180) | |||
| Issuance of notes receivable - franchisees | - | - | (1,070,908) | |||
| Issuance of notes receivable - stockholder | (269,911) | (753,141) | - | |||
| Payments received on notes receivable | 315,490 | 599,904 | 1,707,937 | |||
| Net cash provided by (used in) investing activities | (865,312) | (502,716) | 528,849 | |||
| Financing Activities | ||||||
| Distributions to stockholders | (16,582,517) | (21,339,239) | (8,431,640) | |||
| Net cash used in financing activities | (16,582,517) | (21,339,239) | (8,431,640) | |||
| Increase (Decrease) in Cash and Cash Equivalents | 6,437,298 | (2,330,363) | 8,061,717 | |||
| Cash and Cash Equivalents, Beginning of Year | 17,836,030 | 20,166,393 | 12,104,676 | |||
| Cash and Cash Equivalents, End of Year | $ 24,273,328 | $ 17,836,030 | $ 20,166,393 | |||
| Supplemental Cash Flows Information | ||||||
| Property and equipment, net in accounts payable | $ 60,733 | $ - | $ - |
Source: Item 23 — RECEIPT (FDD pages 65–271)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the increase (decrease) in cash and cash equivalents for the company in 2023 was a decrease of $2,330,363. This figure reflects the net change in City Wide's cash holdings over the course of the year, taking into account all cash inflows and outflows from operating, investing, and financing activities. This decrease contrasts with an increase of $8,061,717 in 2022 and an increase of $6,437,298 in 2024.
For a prospective City Wide franchisee, this data point provides insight into the company's overall financial health and its ability to manage cash flow. A significant decrease in cash and cash equivalents could indicate challenges in profitability, investment strategies, or financing activities. While a single year's decrease isn't necessarily alarming, it warrants further investigation to understand the underlying causes and whether it represents a trend.
Franchisees should consider this information in conjunction with other financial data provided in the FDD, such as the balance sheets and income statements, to gain a comprehensive understanding of City Wide's financial performance. It would be prudent for potential franchisees to discuss this decrease with City Wide's management team to understand the reasons behind it and the strategies in place to improve cash flow in subsequent years. Understanding the context behind these figures is crucial for making an informed investment decision.
It is also important to compare City Wide's cash flow trends with those of other franchises in the commercial cleaning industry to benchmark its performance and identify any potential areas of concern. A thorough financial analysis, including a review of cash flow statements, is a critical step in the due diligence process for any franchise investment.