What was the net decrease in cash for Corner Bakery Cafe in 2024?
Corner_Bakery_Cafe Franchise · 2025 FDDAnswer from 2025 FDD Document
, December 31, 2024 | $ | 177,210 | $ | 6,144,428 | $ | 6,321,638 | |
Statement of Cash Flows For the Reporting Periods ended December 31, 2024 and 2023
| 2024 | 2023 | ||
|---|---|---|---|
| Cash flows from operating activities: | |||
| Cash provided by operating activities: | |||
| Cash received from franchise royalty fees | $ | 2,861,906 | 1,604,088 |
| Cash received from advertising fund fees | 1,323,241 | 678,324 | |
| Cash received from other franchise fees | 146,790 | 28,056 | |
| Cash received fromacquired accounts receivable | 796,353 | ||
| Cash used by operating activities: | |||
| Cash paid to employees | (1,184,888) | (675,282) | |
| Cash paid to service providers and vendors | (2,160,721) | (815,396) | |
| Net cash provided by operating activities | 1 | 986,328 | 1,616,143 |
| Cash flows from financing activities: | |||
| Loans to related parties | (1,146,146) | (1,255,304) | |
| Net cash used by financing activities | (1,146,146) | (1,255,304) | |
| Net (decrease) increase in cash | (159,818) | 360,839 | |
| Cash, beginning of period | 360,839 | - | |
| Cash, end of peri |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 55)
What This Means (2025 FDD)
According to Corner Bakery Cafe's 2025 Franchise Disclosure Document, the company experienced a net decrease in cash of $159,818 in 2024. This contrasts with 2023, where there was a net increase in cash of $360,839. The end-of-period cash balance for 2024 was $201,021, compared to $360,839 at the end of 2023. This indicates that Corner Bakery Cafe used more cash than it generated during 2024, leading to a reduction in its cash reserves.
Several factors contributed to this decrease in cash. While the company saw cash inflows from franchise royalty fees ($2,861,906), advertising fund fees ($1,323,241), and other franchise fees ($146,790), it also experienced significant cash outflows. These outflows included cash paid to employees ($1,184,888) and to service providers and vendors ($2,160,721). Additionally, loans to related parties amounted to $1,146,146, further contributing to the net decrease in cash.
For a prospective franchisee, this information is crucial as it provides insight into the financial health and cash flow management of Corner Bakery Cafe. A decrease in cash could indicate potential challenges in managing expenses or investing in growth opportunities. It is important to note that while the net cash flow decreased, the net income for Corner Bakery Cafe was $146,625 in 2024. This suggests that the decrease in cash may be related to how the company is investing or managing its assets and liabilities, rather than a lack of profitability.
Prospective franchisees should investigate further to understand the reasons behind the net decrease in cash and how Corner Bakery Cafe plans to address this in the future. Understanding the company's financial strategies and cash flow management practices is essential for making an informed investment decision. It would be prudent to ask the franchisor about the specific factors that led to the decrease in cash and what measures are being taken to improve cash flow in subsequent periods.