What was the net amount of advances to affiliates for Hyper Kidz as of December 31, 2022?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
| BALANCE, DECEMBER 31, 2020 | $ | (14,635) | $ | (15,010) | $ | (29,645) |
|---|---|---|---|---|---|---|
| Member contributions | 1,800 | 1,800 | ||||
| Advances to affiliates, net | (163,377) | (163,377) | ||||
| Net income | 46,173 | 46,173 | ||||
| BALANCE, DECEMBER 31, 2021 | 33,338 | (178,387) | (145,049) | |||
| Member distributions | (30,000) | (30,000) | ||||
| Advances to affiliates, net | 1,468 | 1,468 | ||||
| Net income | 52,292 | - | ||||
| BALANCE, DECEMBER 31, 2022 | 55,630 | (176,919) | (173,581) | |||
| Member distributions | (138,866) | - | (138,866) | |||
| Advances to affiliates, net | - | 13,867 | 13,867 | |||
| Net income | 21,106 | - | - |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the net amount of advances to affiliates as of December 31, 2022, was $13,867. This figure reflects the net change in cash flow related to advances made to or received from affiliated companies during that year.
These advances to affiliates are related party transactions, specifically with Maryland Indoor Play, LLC. These advances are not collateralized, are noninterest bearing, and are due on demand.
For a prospective Hyper Kidz franchisee, this indicates the franchisor's financial interactions with its affiliates. Monitoring these transactions can provide insights into the financial health and relationships within the Hyper Kidz network. It is important to note that these advances are reported as a component of members' deficit in the accompanying balance sheets as the advances do not have stated repayment terms and the ownership of these related parties is essentially the same ownership of the company.