What was the net cash used in financing activities 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 related party | 15,096 | (1,444) | (20,676) |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,093,866 | 1,102,404 | 662,679 |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Payment on related party financing | - | - | (21,460) |
| Member's withdrawals | (1,029,271) | (1,052,830) | (641,150) |
| NET CASH USED IN FINANCING ACTIVITIES | (1,029,271) | (1,052,830) | (662,610) |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 64,595 | 49,574 | 69 |
| Cash and cash equivalents at beginning of year | 22 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, the net cash used in financing activities in 2023 was a negative amount, specifically ($1,029,271). This figure reflects the overall cash flow resulting from financing activities, which include items such as payments on related party financing and member's withdrawals.
The primary driver of this negative cash flow appears to be member's withdrawals, which totaled ($1,029,271) for the year. This indicates that the members of Crawlspace Medic withdrew a significant amount of cash from the company during 2023, contributing to the net cash used in financing activities. There were no payments made on related party financing during the year.
For a prospective franchisee, this information provides insight into how Crawlspace Medic manages its finances and how cash is distributed among its members. A large negative cash flow from financing activities driven by member withdrawals could suggest that the company prioritizes returning capital to its members, which may have implications for future investments or growth initiatives. It is important to consider this in the context of the company's overall financial health and its plans for expansion and support of its franchisees.
It would be prudent for a potential Crawlspace Medic franchisee to inquire about the company's long-term financial strategy and how it balances the interests of its members with the needs of the franchise system. Understanding the factors driving these cash flow patterns can help a franchisee assess the financial stability and sustainability of the franchise opportunity.