What was the net income for Endless Summer Sweets?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
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Endless Summer Sweets Franchising Inc. Statement of Cash Flows From March 9 to December 31, 2023
| Net Income | $ | (15,648) |
|---|---|---|
| Net cash provided (consumed) by operating activities | (15,648) | |
| Cash flows from financing activities: | ||
| Stockholders' Contribution | 2,000 | |
| Short Term Loan-Endless Summer Sweets, LLC | 15,648 | |
| Net cash provided (consumed) by financing activities | 17,648 | |
| Net increase (decrease) in cash and e |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Endless Summer Sweets' 2024 Franchise Disclosure Document, the company experienced a net loss. The financial statements reveal that the net income for Endless Summer Sweets from March 9 to December 31, 2023, was a loss of $15,648. This figure is also reflected in the statement of cash flows, which indicates a net cash consumption by operating activities of the same amount.
This net loss indicates that Endless Summer Sweets' expenses exceeded its revenues during its initial period of operations. A significant portion of these expenses was attributed to selling, general, and administrative costs, which totaled $15,648. These costs included $10,000 for advertising and promotion and $5,648 for professional fees.
Prospective franchisees should consider this net loss in the context of the company's early stage of development. Start-up franchise systems often incur initial losses as they invest in establishing their brand and infrastructure. It's important to note that Endless Summer Sweets was formed in March 2023, and the financial statements cover the period from March 9 to December 31, 2023.
Given this information, potential franchisees should inquire about the franchisor's plans for achieving profitability and the financial projections for the coming years. Understanding the strategies Endless Summer Sweets intends to implement to improve its financial performance is crucial for assessing the viability of the franchise opportunity.