What was the members' equity at the end of the year for Fly Fitness?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
rs' equity | 146,051 | | TOTAL LIABILITIES AND MEMBERS' EQUITY | $ 214,928 |
STATEMENT OF INCOME AND MEMBERS' EQUITY
| For the Year Ended December 31 | 2023 |
|---|---|
| Operating revenue | $ - |
| Operating expenses | |
| Advertising and promotion | $ 32,778 |
| Amortization | 12,500 |
| Bank and credit card charges | 10 |
| Computer and internet | 123 |
| Travel | 1,459 |
| Franchise costs | 7,819 |
| Legal and professional fees | 14,080 |
| Meals and entertainment | 145 |
| Office expense | 3,482 |
| Leased employees | 74,004 |
| Subcontractors | 17,674 |
| Website | 2,500 |
| Total operating expenses | $ 166,574 |
| N |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 44)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the members' equity at the end of 2023 was $146,051. This is a decrease from the beginning of the year, when the members' equity was $312,625. In 2022, the members' equity at the end of the year was $312,625, which was also a decrease from the beginning of that year, when it was $468,165.
Members' equity represents the ownership stake in Fly Fitness held by its members (owners or franchisees). A higher members' equity generally indicates a stronger financial position for the company. The decrease in members' equity from the beginning to the end of both 2022 and 2023 indicates that Fly Fitness experienced net losses during those years. Specifically, Fly Fitness had a net loss of $166,574 in 2023 and a net loss of $155,540 in 2022.
For a prospective Fly Fitness franchisee, this information is crucial for assessing the financial health and stability of the franchisor. Declining members' equity and net losses could signal potential challenges for the franchisor in supporting its franchisees. It's important to investigate the reasons behind these losses and understand the franchisor's plans for improving its financial performance. A potential franchisee should also consider how these financial results might impact the services and support they receive from Fly Fitness.
It would be prudent for potential franchisees to ask Fly Fitness about the factors contributing to the net losses and the strategies the company is implementing to improve profitability and increase members' equity. Understanding the franchisor's financial management and future plans is essential for making an informed investment decision.