What was the member's deficit for Face Foundrie in 2022?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
Restrictions on Use
The use of this report is restricted to inclusion within the Company's Franchise Disclosure Document (FDD) and is not intended to be, and should not be, used or relied upon by anyone for any other use.
St. George, Utah April 16, 2025
BALANCE SHEETS
As of December 31, 2024, 2023 and 2022
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | $ 3,480,620 | $ 1,969,123 | $ 1,611,868 |
| Accounts receivable, net | 424,770 | 96,311 | 101,020 |
| Prepaid expenses | 8,530 | 17,976 | - |
| Related party note receivable | 750,000 | 750,000 | 130,986 |
| Deferred contract costs | - | 30,000 | 34,000 |
| Other current assets | - | 29,383 | 73,451 |
| Total current assets | 4,663,920 | 2,892,793 | 1,951,325 |
| Non-current assets | |||
| Operating lease right-of-use asset | 331,322 | 366,840 | 400,209 |
| Equipment, net | 8,039 | 5,030 | 6,577 |
| Intangible assets, net | 41,404 | 53,872 | 42,340 |
| Total non-current assets | 380,765 | 425,742 | 449,126 |
| Total assets | $ 5,044,685 | $ 3,318,535 | $ 2,400,451 |
| Liabilities and Member's Deficit | |||
| Current liabilities | |||
| Accounts payable | $ 42,622 | $ 20,074 | $ - |
| Accrued expenses | 39,488 | 31,279 | 63,084 |
| Credit card payable | 19,368 | 22,075 | 9,497 |
| Gift card liability | 2,434,596 | 1,468,430 | 712,736 |
| Operating lease liability, current | 58,952 | 32,486 | 29,204 |
| Deferred revenue, current | 819,881 | 447,000 | 131,147 |
| Total current liabilities | 3,414,907 | 2,021,344 | 945,668 |
| Non-current liabilities | |||
| Operating lease liability, non-current | 284,843 | 343,795 | 376,281 |
| Deferred revenue, non-current | 1,72 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 73)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the member's deficit for the year ending December 31, 2022, was ($559,155). This figure represents the accumulated losses and distributions exceeding the contributions and net income of the company up to that point in time. A member's deficit indicates that the company's liabilities and obligations exceed its assets, resulting in a negative equity position for the member.
For a prospective Face Foundrie franchisee, this information is crucial for assessing the financial health and stability of the franchisor. A significant member's deficit could raise concerns about the franchisor's ability to support its franchisees, invest in necessary resources, or even remain solvent in the long term. While a deficit does not automatically indicate failure, it warrants careful consideration and further investigation.
It is important to note that the member's deficit is just one aspect of the overall financial picture. A potential franchisee should also review the franchisor's balance sheets, income statements, and cash flow statements to gain a comprehensive understanding of its financial performance. Additionally, it would be prudent to inquire about the franchisor's plans to address the member's deficit and improve its financial position. Understanding the context behind the deficit and the franchisor's strategies for future financial stability is essential for making an informed investment decision regarding a Face Foundrie franchise.