What was the member capital balance for Engineering For Kids as of December 31, 2022?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
| (2,167) | |
| NET INCOME | $ 37,219 | $ | 34,933 | $ | 56,260 | |
ENGINEERING FOR KIDS INTERNATIONAL, LLC STATEMENTS OF MEMBER'S EQUITY YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
| Member Capital | Retained Earnings (Deficit) | Total | |
|---|---|---|---|
| BALANCE, January 1, 2022 | $ 100 | $ (15,900) | $ (15,800) |
| Net income | - | 56,260 | 56,260 |
| BALANCE, December 31, 2022 | 100 | 40,360 | 40,460 |
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, the member capital balance as of December 31, 2022, was $100. This figure represents the capital directly invested by the member in the Engineering For Kids business. It's important to note that this is distinct from retained earnings, which reflect the accumulated profits (or losses) of the business over time. The total member's equity, which combines member capital and retained earnings, was $40,460 as of the same date.
For a prospective franchisee, understanding the member capital balance provides insight into the ownership structure and the financial foundation of Engineering For Kids. A relatively low member capital balance might suggest that the company's growth is primarily funded through retained earnings or other sources of financing. This could influence the franchisee's perception of the company's financial stability and its approach to managing its resources.
It's also worth noting that the member capital balance remained constant at $100 for the years 2022, 2023 and 2024. This indicates that there were no additional capital contributions from the member during these periods. Instead, the company's equity grew through the accumulation of retained earnings, which increased from $(15,900) at the beginning of 2022 to $112,512 by the end of 2024.
Franchisees should consider this information in conjunction with other financial metrics and disclosures in the FDD to gain a comprehensive understanding of Engineering For Kids' financial health and its capital structure. Consulting with a financial advisor can help potential franchisees assess the implications of these figures for their own investment decisions.