What was the balance at the inception of Extreme Art Studio on July 20, 2023?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
ENT OF MEMBER'S EQUITY For the Year Ended December 31, 2023
| Balance at July 20, 2023 (Inception) | $ - |
|---|---|
| Member contributions | 22,622 |
| Net |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 FDD, Extreme Art Studio's balance at inception on July 20, 2023, was $0. The FDD also indicates that member contributions totaled $22,622. However, the company sustained a net loss of ($7,621). By December 31, 2023, the balance was $15,001.
For a prospective franchisee, this information provides a glimpse into the initial financial standing of Extreme Art Studio. The fact that the company started with a zero balance but quickly accumulated member contributions suggests initial investment by its owners. The net loss indicates that the company incurred expenses exceeding its income during its initial months of operation.
It's important to note that these figures reflect the financial performance of the franchisor, Extreme Art Studio Franchising, LLC, and not the performance of individual franchise locations. While the franchisor's financial health is a relevant factor, prospective franchisees should also focus on the financial projections and potential profitability of their own franchise unit, as outlined in other sections of the FDD and through independent research.