What was the total members' equity for Fly Fitness as of December 31, 2023?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
uring the audit.
RGP Associates Certifical Public Accountants, LLC Omaha, Nebraska February 20, 2024
BALANCE SHEET
| December 31 | 2023 |
|---|---|
| ASSETS | |
| Current assets | |
| Cash and cash equivalents | $ 114,928 |
| Total current assets | $ 114,928 |
| Other assets | |
| Intangible assets, less accumulated amortization of $25,000 (note 2) | $ 100,000 |
| Total other assets | $ 100,000 |
| TOTAL ASSETS | $ 214,928 |
| LIABILITIES AND MEMBERS' EQUITY | |
| Current liabilities | |
| Accounts payable | $ 5,200 |
| Credit cards payable | 7,978 |
| Accrued leased employee cost | 5,699 |
| Total current liabilities | $ 18,877 |
| Long-term liabilities | |
| Deferred |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 44)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the total members' equity as of December 31, 2023, was $146,051. This figure represents the ownership stake of the members in the company, calculated as the difference between the company's total assets and total liabilities. It reflects the accumulated capital and retained earnings of Fly Fitness up to that date.
For a prospective franchisee, understanding the members' equity can provide insights into the financial stability and overall health of Fly Fitness. A higher members' equity generally indicates a stronger financial position, suggesting that the company has sufficient assets to cover its liabilities and has been profitable over time. This can be a positive indicator for franchisees, as it implies that Fly Fitness is well-managed and has a solid foundation for future growth.
However, it's important to consider this figure in conjunction with other financial metrics and qualitative factors. For instance, a significant portion of the assets is tied up in intangible assets ($100,000), specifically related to the licensing agreement with "Fly – A Fitness Revolution." While intangible assets can be valuable, their actual worth may be subjective and could be impacted by various factors. Therefore, prospective franchisees should conduct thorough due diligence, including reviewing the complete financial statements and seeking professional advice, to assess the true financial condition of Fly Fitness.
In addition, the FDD indicates that as of December 31, 2023, Fly Fitness had issued a single franchise in Loveland, Colorado, which was not yet open. This suggests that the financial performance reflected in the balance sheet primarily represents the franchisor's operations rather than revenue from franchise operations. As the franchise network expands, the members' equity and overall financial picture may change significantly. Therefore, it is crucial for potential franchisees to understand the current stage of Fly Fitness's development and its plans for future growth.