What is the reported total value of fixed assets for Extreme Art Studio?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
| Total | ||
|---|---|---|
| ASSETS | , | |
| Current Assets | ||
| Bank Accounts | ||
| 1008 Wells Fargo Extreme Art 3537Checking | 15,001.21 | |
| Total Bank Accounts | $ | 15,001.21 |
| Accounts Receivable | ||
| 1100 Accounts Receivable | 0.00 | |
| Total Accounts Receivable | $ | 0.00 |
| Other Current Assets | ||
| Total Other Current Assets | $ | 0.00 |
| Total Current Assets | $ | 15,001.21 |
| Fixed Assets | ||
| 1500 Furniture and Equipment | 0.00 | |
| Total 1500 Furniture and Equipment | $ | 0.00 |
| 1600 Accumulated Depreciation | 0.00 | |
| Total Fixed Assets | $ | 0.00 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the total value of fixed assets is reported as $0.00 as of December 31, 2023. This indicates that Extreme Art Studio had no recorded investment in furniture, equipment, or other fixed assets at the time of this financial statement. The accumulated depreciation is also reported as $0.00. This may reflect that the company is new or that it leases or rents its assets.
For a prospective franchisee, this could mean that the initial investment required to start an Extreme Art Studio franchise might be lower if substantial fixed assets are not required. However, it is important to investigate further to understand why the fixed assets are reported as zero. A potential franchisee should confirm whether this is typical for all franchisees or if it is specific to the franchisor's corporate structure.
It would be prudent for a potential Extreme Art Studio franchisee to inquire about the typical asset requirements for a new franchise location and how these are usually financed. Understanding whether franchisees typically lease equipment or purchase it outright is crucial for accurate financial planning. Additionally, it is important to understand if the franchisor provides any support or guidance in acquiring necessary assets.