What was the (increase) decrease in franchisee fees receivable for Crawlspace Medic in 2021?
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 o |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, the franchisee fees receivable decreased in 2021. The decrease in franchisee fees receivable was ($275,000). This indicates that Crawlspace Medic collected a significant portion of outstanding franchisee fees during that year.
Franchisee fees receivable represents the amount of money owed to Crawlspace Medic by its franchisees for initial franchise fees. A decrease in this figure typically means that franchisees have paid off a portion of their initial fees. This can be a positive sign for the franchisor, as it indicates that franchisees are financially stable and able to meet their obligations.
For a prospective Crawlspace Medic franchisee, this information provides insight into the financial health of the franchise system. While a decrease in franchisee fees receivable is generally positive, it's important to consider the overall context. A large decrease could also indicate that fewer new franchises were sold in the preceding period, as initial franchise fees are a primary source of this receivable. Reviewing several years of data, as presented in the FDD, provides a more complete picture of the trend.
It is important for potential franchisees to further investigate the reasons behind fluctuations in franchisee fees receivable. They should ask Crawlspace Medic about their policies for collecting these fees, the payment terms offered to franchisees, and the typical timeframe for franchisees to pay off their initial fees. This due diligence will help prospective franchisees understand the financial dynamics of the Crawlspace Medic franchise system and assess their own ability to meet the financial obligations.