What was the decrease in due to related party for Crawlspace Medic in 2022?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
,112 | $ | 460,495 | $ 147,585 |
STATEMENTS OF CASH FLOWS CSM FRANCHISE GROUP, LLC
| 2022 | 2021 | 2020 | |
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | $ 808,447 | $ 954,060 | $ 218,669 |
| Net income | |||
| Changes in operating assets and liabilities: | |||
| (Increase) decrease in franchisee fees receivable | 280,000 | (275,000) | (5,000) |
| (Increase) decrease in royalty fees receivable | 9,972 | 3,918 | (9,590) |
| (Increase) decrease in due from related parties | 9,599 | (9,599) | - |
| (Increase) decrease in prepaid expense | 6,918 | (12,168) | - |
| Increase (decrease) in accounts payable and | |||
| accrued expenses | (11,088) | 22,144 | 630 |
| Decrease in due to related party | (1,444) | (20,676) | - |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,102,404 | 662,679 | 204,709 |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Payment on related party financing | - | (21,460) | (53,629) |
| Members' withdrawals | (1,052,830) | (641,150) | (22,222) |
| NET CASH USED IN FINANCING ACTIVITIES | (1,052,830) | (662,610) | (75,851) |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 49,574 | 69 | 128,858 |
| Cash and cash equivalents at beginning of year | 173,299 | 173,230 | 44,372 |
| CASH AND CASH EQUIVALENTS AT END OF YEAR | $ 222,873 | $ 173,299 | $ 173,230 |
NOTE
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, the decrease in due to related party in 2022 was $(1,444). This figure is part of the cash flow from operating activities section within the financial statements. It reflects a change in the amount owed to related parties during that year.
This decrease suggests that Crawlspace Medic reduced its liabilities to related parties in 2022. For a prospective franchisee, this indicates the company is actively managing and settling its financial obligations with entities that have a close relationship with the company.
It's important to note that related-party transactions are common in many businesses, but they require careful scrutiny to ensure they are conducted at arm's length and do not create conflicts of interest. Franchisees should seek clarification from Crawlspace Medic regarding the nature of these related-party transactions and the terms under which they are conducted to ensure transparency and fairness.