What was the total 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) | (62,130) | 55,63 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the total amount due from affiliates, net, as of December 31, 2022, was reported as a deficit of $176,919. This figure is part of the members' deficit within the company's balance sheet.
This "due from affiliates" represents the net balance of transactions between Boomerang Franchise, LLC (Hyper Kidz) and its affiliate, Maryland Indoor Play, LLC. The fact that it's a negative number indicates that the affiliate owed Hyper Kidz more than Hyper Kidz owed the affiliate.
For a prospective Hyper Kidz franchisee, this related-party transaction information provides insight into the financial relationships between the franchisor and its affiliated entities. It's important to understand these relationships because they can impact the overall financial health and stability of the franchise system. While these advances are reported as part of the members' deficit, the FDD notes that these advances do not have stated repayment terms and the ownership of these related parties is essentially the same ownership of the company.