What was the total members' deficit for Crave Cookies in 2022?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
the audit.
FORVIS, LLP
Salt Lake City, Utah November 13, 2023
Balance Sheets December 31, 2022 and 2021
Assets
| 2022 | 2021 | |
|---|---|---|
| Current Assets | ||
| Cash | $ 181,217 | $ 34,177 |
| Accounts receivable | 17,607 | 5-6 |
| Inventory | 7,196 | 21,515 |
| Prepaid expenses | 26,795 | |
| Contract assets | - | 2,000 |
| Note receivable - related party | 15,996 | 62,899 |
| Total current assets | 248,811 | 120,591 |
| Property and Equipment, at Cost | ||
| Equipment | 23,272 | 7,208 |
| Accumulated depreciation | (4,984) | (400) |
| Total property and equipment, net | 18,288 | 6,808 |
| Right-of-Use (ROU) Assets - Operating Leases | 3,716 | 859 |
| Other Assets | 6,410 | 859 |
| Contract Assets - Long-term | 42,595 | |
| Total assets | $ 277,225 | $ 169,994 |
| Liabilities and Members' Deficit | ||
| Current Liabilities | ||
| Accounts payable and accrued expenses | $ 58,990 | $ 17,176 |
| Operating lease liabilities | 4,039 | |
| Contract liabilities, current portion | 6,977 | 262,239 |
| Total current liabilities | 70,006 | 279,415 |
| Long-term Liabilities | ||
| Contract liabilities | 647,694 | 68,180 |
| Total long-term liabilities | 647,694 | 68,180 |
| Total liabilities | 717,700 | 347, |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, the members' deficit as of December 31, 2022, was ($440,475). This figure indicates the accumulated losses and distributions to members exceeding the company's equity.
For a prospective Crave Cookies franchisee, a significant members' deficit could signal financial instability or that the company is in an early growth stage where expenses exceed revenues. It's essential to understand the context behind this deficit. Was it due to initial investments in infrastructure, marketing, or other factors that are expected to generate future returns? A high deficit might raise concerns about the franchisor's ability to support its franchisees or maintain the brand's reputation.
Franchisees should investigate the reasons for the deficit by asking Crave Cookies for detailed explanations and financial projections. Reviewing several years of financial statements, if available, can help determine whether the deficit is improving or worsening. Comparing Crave Cookies's financial performance with other similar franchise systems can also provide valuable insights and help assess the risk associated with this franchise opportunity.