What was the amount of royalties collected in advance by Hyper Kidz in 2021?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
| 13,867 | | 13,867 |
| Net income | | 21,106 | | - | | - | | BALANCE, DECEMBER 31, 2023 | $ | (62,130) | $ | (163,052) | $ | (298,580) |
BOOMERANG FRANCHISE, LLC STATEMENTS OF CASH FLOWS
| YEARS ENDED DECEMBER 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | 2021 | ||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
| Net income) | $ | 21,106 | $ | 52,292 | $ | 46,173 |
| Adjustments to reconcile net income to net | ||||||
| cash provided by operating activities: | ||||||
| Recognition of non-refundable deferred franchise sales | (14,063) | (4,279) | (3,950) | |||
| Changes in assets and liabilities: | ||||||
| Accounts receivable | (2,149) | (18,006) | ||||
| Accounts payable and accrued expense | 2,932 | 2,993 | 820 | |||
| Royalties collected in advance | - | (36,612) | 36,612 | |||
| Non-refundable deferred franchise fees | 128,000 | 39,500 | ||||
| Net cash provided by operating activities | 135,826 | 35,888 | 79,655 | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
| Proceeds from notes payable | - | - | 79,000 | |||
| Advances to affiliates, net | 13,867 | 1,468 | (163,377) | |||
| Member contributions | - | - | 1,800 | |||
| Member distributions | (138,866) | (30,000) | - | |||
| Net cash (used) by financing activities | (124,999) | (28,532) | (82,577) | |||
| NET INCREASE (DECREASE) IN CASH | 10,827 | 7,356 | (2,922) | |||
| CASH, BEGINNING | 7,376 | 20 | 2,942 | |||
| CASH, ENDING | $ | 18,203 | $ | 7,376 | $ | 20 |
| SUPPLEMENTAL DISCLOSURES | ||||||
| Cash paid for interest | $ | - | $ | - | $ | - |
| Cas |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the royalties collected in advance in 2021 amounted to $36,612. This figure appears in the cash flow statement under 'Cash Flows From Operating Activities' as a change in assets and liabilities.
For a prospective franchisee, understanding the 'Royalties collected in advance' line is important. This represents payments Hyper Kidz received for royalties before they were actually earned. In 2021, this was a positive $36,612, meaning Hyper Kidz collected this amount in advance. In 2022, the figure is negative (-$36,612), indicating that the advance payments were recognized as revenue, decreasing the amount of unearned revenue.
This advance collection of royalties can impact Hyper Kidz's cash flow and financial reporting. Franchisees should inquire about the terms and conditions under which royalties are collected in advance, as this could affect their own payment schedules and financial planning. Understanding these nuances can help a franchisee better manage their financial relationship with Hyper Kidz.