What was the amount due from affiliates, net, for Hyper Kidz as of December 31, 2022?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
ings, and certain internal control—related matters that we identified during the audit.
Ft. Collins, Colorado March 23, 2024
BOOMERANG FRANCHISE, LLC BALANCE SHEETS
| AS OF DECEMBER 31, | ||||
|---|---|---|---|---|
| 2023 | 2022 | |||
| ASSETS: | ||||
| CURRENT ASSETS | ||||
| Cash and equivalents | $ | 18,203 | $ | 7,376 |
| Accounts receivable | 20,155 | 18,006 | ||
| TOTAL CURRENT ASSETS | 38,358 | 25,382 | ||
| TOTAL ASSETS | $ | 38,358 | $ | 25,382 |
| LIABILITIES AND MEMBERS' (DEFICIT): | ||||
| CURRENT LIABILITIES | ||||
| Accounts payable and accrued expenses | $ | 6,745 | $ | 3,813 |
| Non-refundable deferred franchise sales, current portion | 20,700 | 7,900 | ||
| Notes payable, current portion | - | 341 | ||
| TOTAL CURRENT LIABILITIES | 27,445 | 12,054 | ||
| LONG-TERM LIABILITIES | ||||
| Non-refundable deferred franchise sales | 157,095 | 55,958 | ||
| Notes payable | 79,000 | 78,659 | ||
| TOTAL LIABILITIES | 263,540 | 146,671 | ||
| MEMBERS' (DEFICIT) | ||||
| Members' equity (deficit |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the amount due from affiliates, net, as of December 31, 2022, was reported as a negative $176,919. This figure appears in the balance sheets within the financial statements. It is important to note that Hyper Kidz's affiliate is Maryland Indoor Play, LLC, which owns and operates a business of the type being franchised.
The 'due from affiliates, net' represents the net balance of transactions between Boomerang Franchise, LLC (Hyper Kidz) and its affiliate, Maryland Indoor Play, LLC. The negative value indicates that the affiliate owed Hyper Kidz $176,919 as of the end of 2022. This could be due to various intercompany transactions, such as loans, services provided, or other financial arrangements.
This figure is reported as a component of members' deficit in the accompanying balance sheets because the advances do not have stated repayment terms, and the ownership of these related parties is essentially the same as the ownership of the company. This accounting treatment reflects the close relationship and common ownership between Hyper Kidz and its affiliate.
Prospective franchisees should be aware of these related-party transactions, as they can impact the overall financial health and stability of the franchise system. It would be prudent to inquire about the nature of these transactions, the terms of repayment (if any), and the potential impact on the franchisee's business. Understanding the financial relationship between Hyper Kidz and its affiliate can provide valuable insights into the franchise's operations and financial management.