What was the total amount of Craters & Freighters' long-term liabilities as of December 31, 2023?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| $ 9,391,294 $ | 4,370,648 |
Balance Sheets (Continued)
| As of December 31, | 2023 | 2022 |
|---|---|---|
| Current Liabilities: | ||
| Accounts Payable | $ 1,061,526 $ | 1,241,420 |
| Accrued Liabilities | 1,790 | 458 |
| Accrued Bonus | - | 132,340 |
| Operating Lease Liability - Due Within One Year | 76,496 | 73,646 |
| Total Current Liabilities | 1,139,812 | 1,447,864 |
| Long Term Liabilities: | ||
| Due to Shareholder | 2,769,688 | - |
| Operating Lease Liability - Due After One Year | 67,655 | 141,875 |
| Total Long-Term Liabilities | 2,837,343 | 141,875 |
| Total Liabilities | 3,977,155 | 1,589,739 |
| Shareholder's Equity | ||
| Common Stock, No Par Value; 1,000,000 Shares | ||
| Authorized; 1,000,000 Shares Issued and Outstanding | 100 | 100 |
| Additional Paid-in Capital | 800 | 800 |
| Retained Earnings | 5,413,239 | 2,780,009 |
| Total Shareholder's Equity | 5,414,139 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the company's total long-term liabilities as of December 31, 2023, amounted to $2,837,343. This figure is composed of two specific liabilities: $2,769,688 due to a shareholder and $67,655 representing the operating lease liability due after one year.
It's important for a prospective franchisee to understand the nature of these liabilities. The 'Due to Shareholder' liability indicates a debt Craters & Freighters owed to its shareholder, which was a significant portion of its long-term debt. The operating lease liability represents the future lease payments for office space extending beyond one year. These long-term liabilities reflect financial obligations extending beyond the current year, which can impact the company's financial stability and future cash flows.
Reviewing the trend of these liabilities over time, as presented in the FDD, can provide insights into Craters & Freighters' financial management and its ability to meet its long-term obligations. Note that the balance due to the shareholder was paid in full during the year ended December 31, 2024, and as of that date, the amount due to the shareholder was $0. Understanding the composition and changes in long-term liabilities is crucial for assessing the financial health and stability of Craters & Freighters as a franchise opportunity.