What were the proceeds from notes payable for Hyper Kidz in 2021?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
68 | | 1,468 | | Net income | | 52,292 | | | | - | | BALANCE, DECEMBER 31, 2022 | $ | 55,630 | $ | (176,919) | $ | (173,581) |
FOR THE YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020 BOOMERANG FRANCHISE, LLC STATEMENTS OF CASH FLOWS
| 2022 | 2021 | 2020 | |
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net income) | $ 52,292 | $ 46,173 | $ 110,241 |
| Adjustments to reconcile net income to net | |||
| cash provided by operating activities: | |||
| Recognition of non-refundable deferred franchise sales | (4,279) | (3,950) | (6,913) |
| Changes in assets and liabilities: | |||
| Accounts receivable | (18,006) | ||
| Accrued expense | 2,993 | 820 | - |
| Royalties collected in advance | (36,612) | 36,612 | - |
| Non-refundable deferred franchise fees | 39,500 | ||
| Net cash provided by operating activities | 35,888 | 79,655 | 103,328 |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Proceeds from notes payable | - | 79,000 | - |
| Advances to affiliates, net | 1,468 | (163,377) | - |
| Member contributions | - | 1,800 | - |
| Member distributions | (30,000) | - | (100,386) |
| Net cash (used) by financing activities | (28,532) | (82,577) | (100,386) |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the proceeds from notes payable in 2021 were $79,000. This indicates that Hyper Kidz acquired a significant amount of financing through notes payable during that year.
For a prospective franchisee, understanding the franchisor's debt obligations can be crucial. A high level of debt might indicate financial strain, while a manageable level could reflect strategic investments in the company's growth. The fact that Hyper Kidz secured $79,000 through notes payable could mean they were investing in expansion, improvements, or managing operational costs.
It's also worth noting that the FDD includes information about a note payable with the Small Business Administration (SBA) for $79,000, with monthly installments of $407 at an interest rate of 3.75%, with a final payment due in 2050. This note is collateralized by the company's assets. This could be the same note from which the proceeds were derived in 2021. A franchisee should inquire about the specifics of these notes, including their terms, to assess the financial health and stability of Hyper Kidz.