What was the increase or decrease in franchisee fees receivable for Crawlspace Medic in 2023?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
24 | $ | 216,112 | $ | 460,495 |
STATEMENTS OF CASH FLOWS CSM FRANCHISE GROUP, LLC
| 2023 | For the Years Ended December 31, 2022 | 2021 | |
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net income | $ 1,149,783 | $ 808,447 | $ 954,060 |
| Change in noncash rental assets and liability | (1,167) | - | - |
| Changes in operating assets and liabilities: | |||
| (Increase) decrease in franchisee fees receivable | (53,100) | 280,000 | (275,000) |
| Decrease in royalty fees receivable | - | 9,972 | 3,918 |
| (Increase) decrease in due from related parties | - | 9,599 | (9,599) |
| (Increase) decrease in prepaid expense | (21,437) | 6,918 | (12,168) |
| Increase (decrease) in accounts payable and | |||
| accrued expenses | 4,691 | (11,088) | 22,144 |
| Increase (decrease) in due to relat |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, there was a decrease in franchisee fees receivable in 2023. The change in franchisee fees receivable is reflected in the cash flow statement under 'Cash Flows From Operating Activities'.
Specifically, the FDD indicates a decrease of $53,100 in franchisee fees receivable for the year 2023. This means that Crawlspace Medic collected more in outstanding franchisee fees than it had in the previous year. Franchisee fees receivable represents the amount of initial franchise fees that are due to Crawlspace Medic but have not yet been collected.
For a prospective franchisee, this indicates the importance of understanding the franchisor's accounting practices and financial health. Monitoring changes in franchisee fees receivable can provide insights into the company's ability to collect outstanding payments and manage its cash flow effectively. A decrease could signal more efficient collection processes, while a significant increase might suggest potential issues with franchisees fulfilling their financial obligations.